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Dear Colleagues,

Has anyone developed an elective course on Socially Responsible Investing
(SRI)? Or maybe integrated a few sessions on SRI in a course? I am looking
for syllabi on the subject.

Thanks

Magali

Magali Delmas
Assistant Professor
Donald Bren School of Environmental Science and Management
University of California, Santa Barbara
CA 93106-5131
Phone (805) 893-7185
Email: delmas@bren.ucsb.edu
http://www.bren.ucsb.edu/~delmas/

Magali -

I always do one session on SRI in my business & society course, basically
using online material from the Social Venture Network (they have biennial
reports on the amount of money under investment) and annual reports on SR
mutual funds' screens and performance. I also show a video on Vermont
National Bank to introduce students to the topic of community-based social
investing. Shorebank Pacific would be a better example today, but I don't
think there is a video about them.

Gordon

Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:

> Dear Colleagues,
>
> Has anyone developed an elective course on Socially Responsible Investing
> (SRI)? Or maybe integrated a few sessions on SRI in a course? I am looking
> for syllabi on the subject.
>
> Thanks
>
> Magali
>
> Magali Delmas
> Assistant Professor
> Donald Bren School of Environmental Science and Management
> University of California, Santa Barbara
> CA 93106-5131
> Phone (805) 893-7185
> Email: delmas@bren.ucsb.edu
> http://www.bren.ucsb.edu/~delmas/
>

Hi Magali. I can't help you out with a syllabus, but I can suggest a few articles you might want to include in one. Here's one on SRI I have forthcoming at SMJ that runs through the arguments, pro and con, for SRI, and finds an answer that sort of bridges these two positions:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950

More student friendly might be the 2003 debate in O&E on the topic, between Jon Entine, Sandra Waddock, and me & my co-author, Rob Salomon. Here's a link to our portion of this debate:

http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070

I hope these will be of interest. And I hope you'll share with us whatever you come up with for a syllabus.

Best,
Mike

********************
Michael L. Barnett, PhD
University of South Florida
College of Business Administration
Department of Management & Organization
4202 E. Fowler Avenue, BSN 3527
Tampa, FL 33620-5500
Phone: 813-974-1727
Fax: 813-974-1734
Webpage: http://www.coba.usf.edu/barnett

View my research on my SSRN Author page:
<http://ssrn.com/author=414796>


________________________________

From: Organizations and the Natural Environment Discussion on behalf of Gordon P Rands
Sent: Wed 4/5/2006 2:14 AM
To: ONE-L@AOMLISTS.PACE.EDU
Subject: Re: SRI



Magali -

I always do one session on SRI in my business & society course, basically
using online material from the Social Venture Network (they have biennial
reports on the amount of money under investment) and annual reports on SR
mutual funds' screens and performance. I also show a video on Vermont
National Bank to introduce students to the topic of community-based social
investing. Shorebank Pacific would be a better example today, but I don't
think there is a video about them.

Gordon

Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:

> Dear Colleagues,
>
> Has anyone developed an elective course on Socially Responsible Investing
> (SRI)? Or maybe integrated a few sessions on SRI in a course? I am looking
> for syllabi on the subject.
>
> Thanks
>
> Magali
>
> Magali Delmas
> Assistant Professor
> Donald Bren School of Environmental Science and Management
> University of California, Santa Barbara
> CA 93106-5131
> Phone (805) 893-7185
> Email: delmas@bren.ucsb.edu
> http://www.bren.ucsb.edu/~delmas/
>

Hi Magali,

How are you? As for SRI here are some thoughts off the top of my head.

I can envision at least four classes on this topic.

1. Identifies the nature of SRI as part of the social movement that is CSR
thinking and practice. The key point here is that it is part of the
contemporay 'system' or social architecture of CSR. in contrsat to the
past where enviornmental behaviour and basic social standards were set by
command-and-control government the emergence of SRI is part of the the
markets response to CSR.

2. Logically this would be followed by a more detailed account of how SRI
funds operate - their use of expert screening boards, screening mechanisms
and so on. This might include comment on their attraction to investors
and their alignment with CSR principles in their own behaviour. Funds of
course divide between those driven by CSR committeed banks and financial
institutions and those that are simply part of the portfolio of otherwise
unreconstructed finance houses (simply offering SRI funds because there is
demand for these products);

3. This itself could be followed by a class with a more critical
perpsective on SRI. The argument might be that SRI funds outperform
conventioanl funds. You would expect this if SR practices were an
indicator of the quality of maanagement. How then are SRI included
companies screened? In addition, if we assume (as I do) that corportae
responsibility requires innovation and that innovation is risky so we
would expect that some SRI companies would be more successful than
ordinary companies but others would be failures. How does this affect SRI
performance.

On the critical front you could also address the linguistic deception
involve in some well-know (globally visible) SRIs that call themselves
sustainability funds when at best they include companies that have managed
to simply reduce their impact on the planet. Do these funds help or
hinder progress?

4. It would be fun and maybe even useful to set up a role play for a class
to identify the interest and position of SRI 'stakeholders'. This might
include fund managers, SRI (analysts and screening agencies), companies
both those in and those out of these funds, investment communities,
investors etc. Write a vignette on each stakeholder and invite student
groups to consider the SRI phenomenon from the perspectives of one of the
groups and discuss the outcomes.

Nigel Roome


> Hi Magali. I can't help you out with a syllabus, but I can suggest a few
> articles you might want to include in one. Here's one on SRI I have
> forthcoming at SMJ that runs through the arguments, pro and con, for SRI,
> and finds an answer that sort of bridges these two positions:
>
> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
>
> More student friendly might be the 2003 debate in O&E on the topic,
> between Jon Entine, Sandra Waddock, and me & my co-author, Rob Salomon.
> Here's a link to our portion of this debate:
>
> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
>
> I hope these will be of interest. And I hope you'll share with us
> whatever you come up with for a syllabus.
>
> Best,
> Mike
>
> ********************
> Michael L. Barnett, PhD
> University of South Florida
> College of Business Administration
> Department of Management & Organization
> 4202 E. Fowler Avenue, BSN 3527
> Tampa, FL 33620-5500
> Phone: 813-974-1727
> Fax: 813-974-1734
> Webpage: http://www.coba.usf.edu/barnett
>
> View my research on my SSRN Author page:
> <http://ssrn.com/author=414796>
>
>
> ________________________________
>
> From: Organizations and the Natural Environment Discussion on behalf of
> Gordon P Rands
> Sent: Wed 4/5/2006 2:14 AM
> To: ONE-L@AOMLISTS.PACE.EDU
> Subject: Re: SRI
>
>
>
> Magali -
>
> I always do one session on SRI in my business & society course, basically
> using online material from the Social Venture Network (they have biennial
> reports on the amount of money under investment) and annual reports on SR
> mutual funds' screens and performance. I also show a video on Vermont
> National Bank to introduce students to the topic of community-based social
> investing. Shorebank Pacific would be a better example today, but I don't
> think there is a video about them.
>
> Gordon
>
> Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
>
>> Dear Colleagues,
>>
>> Has anyone developed an elective course on Socially Responsible
>> Investing
>> (SRI)? Or maybe integrated a few sessions on SRI in a course? I am
>> looking
>> for syllabi on the subject.
>>
>> Thanks
>>
>> Magali
>>
>> Magali Delmas
>> Assistant Professor
>> Donald Bren School of Environmental Science and Management
>> University of California, Santa Barbara
>> CA 93106-5131
>> Phone (805) 893-7185
>> Email: delmas@bren.ucsb.edu
>> http://www.bren.ucsb.edu/~delmas/
>>
>

There are a couple of syllabi related to SRI posted on the website of the
Institute for Responsible Investing (IRI) (housed within the Center for
Corporate Citizenship at Boston College): one from Bainbridge Institute,
one from Daniels College, and one from Georgetown. The following link will
lead your there:

http://www.bcccc.net/index.cfm?fuseaction=Page.viewPage&pageID=1051

The IRI does a number of things, aimed primarily at practitioners, including
regular convenings, attempting to identify SRI-related research, and shaping
policy.
(see http://www.bcccc.net/index.cfm?fuseaction=Page.viewPage&pageId=1191)

I imagine that David Wood, IRI's administrator
(responsibleinvestment@bc.edu) , would be pleased to hear about any other
related syllabi or SRI research.
Sandra


Sandra Waddock, Professor of Management
Carroll School of Management and
Senior Research Fellow,
BC Center for Corporate Citizenship
Boston College
Chestnut Hill, MA 02467

617-552-0477
f: 617-552-0433
waddock@bc.edu
http://www2.bc.edu/~waddock/



-----Original Message-----
From: Organizations and the Natural Environment Discussion
[mailto:ONE-L@AOMLISTS.PACE.EDU] On Behalf Of roome@FSW.EUR.NL
Sent: Wednesday, April 05, 2006 9:59 AM
To: ONE-L@AOMLISTS.PACE.EDU
Subject: Re: SRI


Hi Magali,

How are you? As for SRI here are some thoughts off the top of my head.

I can envision at least four classes on this topic.

1. Identifies the nature of SRI as part of the social movement that is CSR
thinking and practice. The key point here is that it is part of the
contemporay 'system' or social architecture of CSR. in contrsat to the past
where enviornmental behaviour and basic social standards were set by
command-and-control government the emergence of SRI is part of the the
markets response to CSR.

2. Logically this would be followed by a more detailed account of how SRI
funds operate - their use of expert screening boards, screening mechanisms
and so on. This might include comment on their attraction to investors and
their alignment with CSR principles in their own behaviour. Funds of course
divide between those driven by CSR committeed banks and financial
institutions and those that are simply part of the portfolio of otherwise
unreconstructed finance houses (simply offering SRI funds because there is
demand for these products);

3. This itself could be followed by a class with a more critical
perpsective on SRI. The argument might be that SRI funds outperform
conventioanl funds. You would expect this if SR practices were an indicator
of the quality of maanagement. How then are SRI included companies
screened? In addition, if we assume (as I do) that corportae responsibility
requires innovation and that innovation is risky so we would expect that
some SRI companies would be more successful than ordinary companies but
others would be failures. How does this affect SRI performance.

On the critical front you could also address the linguistic deception
involve in some well-know (globally visible) SRIs that call themselves
sustainability funds when at best they include companies that have managed
to simply reduce their impact on the planet. Do these funds help or hinder
progress?

4. It would be fun and maybe even useful to set up a role play for a class
to identify the interest and position of SRI 'stakeholders'. This might
include fund managers, SRI (analysts and screening agencies), companies both
those in and those out of these funds, investment communities, investors
etc. Write a vignette on each stakeholder and invite student groups to
consider the SRI phenomenon from the perspectives of one of the groups and
discuss the outcomes.

Nigel Roome


> Hi Magali. I can't help you out with a syllabus, but I can suggest a
few
> articles you might want to include in one. Here's one on SRI I have
> forthcoming at SMJ that runs through the arguments, pro and con, for
> SRI, and finds an answer that sort of bridges these two positions:
>
> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
>
> More student friendly might be the 2003 debate in O&E on the topic,
> between Jon Entine, Sandra Waddock, and me & my co-author, Rob
> Salomon. Here's a link to our portion of this debate:
>
> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
>
> I hope these will be of interest. And I hope you'll share with us
> whatever you come up with for a syllabus.
>
> Best,
> Mike
>
> ********************
> Michael L. Barnett, PhD
> University of South Florida
> College of Business Administration
> Department of Management & Organization
> 4202 E. Fowler Avenue, BSN 3527
> Tampa, FL 33620-5500
> Phone: 813-974-1727
> Fax: 813-974-1734
> Webpage: http://www.coba.usf.edu/barnett
>
> View my research on my SSRN Author page:
> <http://ssrn.com/author=414796>
>
>
> ________________________________
>
> From: Organizations and the Natural Environment Discussion on behalf
> of Gordon P Rands
> Sent: Wed 4/5/2006 2:14 AM
> To: ONE-L@AOMLISTS.PACE.EDU
> Subject: Re: SRI
>
>
>
> Magali -
>
> I always do one session on SRI in my business & society course,
> basically using online material from the Social Venture Network (they
> have biennial reports on the amount of money under investment) and
> annual reports on SR mutual funds' screens and performance. I also
> show a video on Vermont National Bank to introduce students to the
> topic of community-based social investing. Shorebank Pacific would be
> a better example today, but I don't think there is a video about them.
>
> Gordon
>
> Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
>
>> Dear Colleagues,
>>
>> Has anyone developed an elective course on Socially Responsible
>> Investing (SRI)? Or maybe integrated a few sessions on SRI in a
>> course? I am looking
>> for syllabi on the subject.
>>
>> Thanks
>>
>> Magali
>>
>> Magali Delmas
>> Assistant Professor
>> Donald Bren School of Environmental Science and Management University
>> of California, Santa Barbara CA 93106-5131
>> Phone (805) 893-7185
>> Email: delmas@bren.ucsb.edu
>> http://www.bren.ucsb.edu/~delmas/
>>
>

One last thing, according to David Wood at the Institute for Responsible
Investing, IRI is undertaking a curriculum development project, a
description of which follows.

Curriculum Project:

In 2006 the IRI will develop a curriculum for responsible investment,
adaptable for use in both professional training/certification and business
school education. Such a curriculum can bring definition and coherence to
the field, help disseminate and legitimize responsible investment in the
wider financial community, and identify new areas for research and practical
application of responsible investment techniques.

The IRI would welcome your input at: responsibleinvestment@bc.edu

Sandra

Sandra Waddock, Professor of Management
Carroll School of Management and
Senior Research Fellow,
BC Center for Corporate Citizenship
Boston College
Chestnut Hill, MA 02467

617-552-0477
f: 617-552-0433
waddock@bc.edu
http://www2.bc.edu/~waddock/



-----Original Message-----
From: Organizations and the Natural Environment Discussion
[mailto:ONE-L@AOMLISTS.PACE.EDU] On Behalf Of roome@FSW.EUR.NL
Sent: Wednesday, April 05, 2006 9:59 AM
To: ONE-L@AOMLISTS.PACE.EDU
Subject: Re: SRI


Hi Magali,

How are you? As for SRI here are some thoughts off the top of my head.

I can envision at least four classes on this topic.

1. Identifies the nature of SRI as part of the social movement that is CSR
thinking and practice. The key point here is that it is part of the
contemporay 'system' or social architecture of CSR. in contrsat to the past
where enviornmental behaviour and basic social standards were set by
command-and-control government the emergence of SRI is part of the the
markets response to CSR.

2. Logically this would be followed by a more detailed account of how SRI
funds operate - their use of expert screening boards, screening mechanisms
and so on. This might include comment on their attraction to investors and
their alignment with CSR principles in their own behaviour. Funds of course
divide between those driven by CSR committeed banks and financial
institutions and those that are simply part of the portfolio of otherwise
unreconstructed finance houses (simply offering SRI funds because there is
demand for these products);

3. This itself could be followed by a class with a more critical
perpsective on SRI. The argument might be that SRI funds outperform
conventioanl funds. You would expect this if SR practices were an indicator
of the quality of maanagement. How then are SRI included companies
screened? In addition, if we assume (as I do) that corportae responsibility
requires innovation and that innovation is risky so we would expect that
some SRI companies would be more successful than ordinary companies but
others would be failures. How does this affect SRI performance.

On the critical front you could also address the linguistic deception
involve in some well-know (globally visible) SRIs that call themselves
sustainability funds when at best they include companies that have managed
to simply reduce their impact on the planet. Do these funds help or hinder
progress?

4. It would be fun and maybe even useful to set up a role play for a class
to identify the interest and position of SRI 'stakeholders'. This might
include fund managers, SRI (analysts and screening agencies), companies both
those in and those out of these funds, investment communities, investors
etc. Write a vignette on each stakeholder and invite student groups to
consider the SRI phenomenon from the perspectives of one of the groups and
discuss the outcomes.

Nigel Roome


> Hi Magali. I can't help you out with a syllabus, but I can suggest a
few
> articles you might want to include in one. Here's one on SRI I have
> forthcoming at SMJ that runs through the arguments, pro and con, for
> SRI, and finds an answer that sort of bridges these two positions:
>
> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
>
> More student friendly might be the 2003 debate in O&E on the topic,
> between Jon Entine, Sandra Waddock, and me & my co-author, Rob
> Salomon. Here's a link to our portion of this debate:
>
> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
>
> I hope these will be of interest. And I hope you'll share with us
> whatever you come up with for a syllabus.
>
> Best,
> Mike
>
> ********************
> Michael L. Barnett, PhD
> University of South Florida
> College of Business Administration
> Department of Management & Organization
> 4202 E. Fowler Avenue, BSN 3527
> Tampa, FL 33620-5500
> Phone: 813-974-1727
> Fax: 813-974-1734
> Webpage: http://www.coba.usf.edu/barnett
>
> View my research on my SSRN Author page:
> <http://ssrn.com/author=414796>
>
>
> ________________________________
>
> From: Organizations and the Natural Environment Discussion on behalf
> of Gordon P Rands
> Sent: Wed 4/5/2006 2:14 AM
> To: ONE-L@AOMLISTS.PACE.EDU
> Subject: Re: SRI
>
>
>
> Magali -
>
> I always do one session on SRI in my business & society course,
> basically using online material from the Social Venture Network (they
> have biennial reports on the amount of money under investment) and
> annual reports on SR mutual funds' screens and performance. I also
> show a video on Vermont National Bank to introduce students to the
> topic of community-based social investing. Shorebank Pacific would be
> a better example today, but I don't think there is a video about them.
>
> Gordon
>
> Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
>
>> Dear Colleagues,
>>
>> Has anyone developed an elective course on Socially Responsible
>> Investing (SRI)? Or maybe integrated a few sessions on SRI in a
>> course? I am looking
>> for syllabi on the subject.
>>
>> Thanks
>>
>> Magali
>>
>> Magali Delmas
>> Assistant Professor
>> Donald Bren School of Environmental Science and Management University
>> of California, Santa Barbara CA 93106-5131
>> Phone (805) 893-7185
>> Email: delmas@bren.ucsb.edu
>> http://www.bren.ucsb.edu/~delmas/
>>
>

It might even be fun to allow the students to address the fact that SRI
research has historically been a disaster in identifying "socially
responsible" behavior; that there is no definition of SR behavior or CSR for
that matter, as most definitions are narrow ideological conceits; that
stocks screened for SRI do NOT perform better than comparable non-SRI
stocks; the ONLY benefits have come from "sector segregation," which of
course caused SRI stocks to underperform dramatically over the past 5 years.

You could start by having them read a balanced book on the subject: David
Vogel's book on The Market for Virture, which punctures most of the
hare-brained claims of the 'cult of CSR' and the horrid quality of
"research" generated by SRI researchers.

You might also have the students read the article I wrote in Organization
and Environment so they will not be patronized by pre-cooked ideological
perspectives on this and might be prompted to actually think creatively,
without intimidation to deliver the precooked palaver juiced out by the
CSR/SRI community.

I apologize in advance for the colorful language, but isn't in time adults
teaching kids took real responsibility for teaching critical thinking?

SRI is one of the most unprogressive and elitist movements of our time... A
sorry bastardization of corporate responsibility.

Cheers,


--

Jon Entine
http://www.jonentine.com

(513) 527-4385
cell: 319-8388
FAX: 527-4386




On 4/5/06 9:59 AM, "roome@FSW.EUR.NL" <roome@FSW.EUR.NL> wrote:

> Hi Magali,
>
> How are you? As for SRI here are some thoughts off the top of my head.
>
> I can envision at least four classes on this topic.
>
> 1. Identifies the nature of SRI as part of the social movement that is CSR
> thinking and practice. The key point here is that it is part of the
> contemporay 'system' or social architecture of CSR. in contrsat to the
> past where enviornmental behaviour and basic social standards were set by
> command-and-control government the emergence of SRI is part of the the
> markets response to CSR.
>
> 2. Logically this would be followed by a more detailed account of how SRI
> funds operate - their use of expert screening boards, screening mechanisms
> and so on. This might include comment on their attraction to investors
> and their alignment with CSR principles in their own behaviour. Funds of
> course divide between those driven by CSR committeed banks and financial
> institutions and those that are simply part of the portfolio of otherwise
> unreconstructed finance houses (simply offering SRI funds because there is
> demand for these products);
>
> 3. This itself could be followed by a class with a more critical
> perpsective on SRI. The argument might be that SRI funds outperform
> conventioanl funds. You would expect this if SR practices were an
> indicator of the quality of maanagement. How then are SRI included
> companies screened? In addition, if we assume (as I do) that corportae
> responsibility requires innovation and that innovation is risky so we
> would expect that some SRI companies would be more successful than
> ordinary companies but others would be failures. How does this affect SRI
> performance.
>
> On the critical front you could also address the linguistic deception
> involve in some well-know (globally visible) SRIs that call themselves
> sustainability funds when at best they include companies that have managed
> to simply reduce their impact on the planet. Do these funds help or
> hinder progress?
>
> 4. It would be fun and maybe even useful to set up a role play for a class
> to identify the interest and position of SRI 'stakeholders'. This might
> include fund managers, SRI (analysts and screening agencies), companies
> both those in and those out of these funds, investment communities,
> investors etc. Write a vignette on each stakeholder and invite student
> groups to consider the SRI phenomenon from the perspectives of one of the
> groups and discuss the outcomes.
>
> Nigel Roome
>
>
>> Hi Magali. I can't help you out with a syllabus, but I can suggest a few
>> articles you might want to include in one. Here's one on SRI I have
>> forthcoming at SMJ that runs through the arguments, pro and con, for SRI,
>> and finds an answer that sort of bridges these two positions:
>>
>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
>>
>> More student friendly might be the 2003 debate in O&E on the topic,
>> between Jon Entine, Sandra Waddock, and me & my co-author, Rob Salomon.
>> Here's a link to our portion of this debate:
>>
>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
>>
>> I hope these will be of interest. And I hope you'll share with us
>> whatever you come up with for a syllabus.
>>
>> Best,
>> Mike
>>
>> ********************
>> Michael L. Barnett, PhD
>> University of South Florida
>> College of Business Administration
>> Department of Management & Organization
>> 4202 E. Fowler Avenue, BSN 3527
>> Tampa, FL 33620-5500
>> Phone: 813-974-1727
>> Fax: 813-974-1734
>> Webpage: http://www.coba.usf.edu/barnett
>>
>> View my research on my SSRN Author page:
>> <http://ssrn.com/author=414796>
>>
>>
>> ________________________________
>>
>> From: Organizations and the Natural Environment Discussion on behalf of
>> Gordon P Rands
>> Sent: Wed 4/5/2006 2:14 AM
>> To: ONE-L@AOMLISTS.PACE.EDU
>> Subject: Re: SRI
>>
>>
>>
>> Magali -
>>
>> I always do one session on SRI in my business & society course, basically
>> using online material from the Social Venture Network (they have biennial
>> reports on the amount of money under investment) and annual reports on SR
>> mutual funds' screens and performance. I also show a video on Vermont
>> National Bank to introduce students to the topic of community-based social
>> investing. Shorebank Pacific would be a better example today, but I don't
>> think there is a video about them.
>>
>> Gordon
>>
>> Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
>>
>>> Dear Colleagues,
>>>
>>> Has anyone developed an elective course on Socially Responsible
>>> Investing
>>> (SRI)? Or maybe integrated a few sessions on SRI in a course? I am
>>> looking
>>> for syllabi on the subject.
>>>
>>> Thanks
>>>
>>> Magali
>>>
>>> Magali Delmas
>>> Assistant Professor
>>> Donald Bren School of Environmental Science and Management
>>> University of California, Santa Barbara
>>> CA 93106-5131
>>> Phone (805) 893-7185
>>> Email: delmas@bren.ucsb.edu
>>> http://www.bren.ucsb.edu/~delmas/
>>>
>>

Jon,

a colourful mail indeed! But I assume that you would allow business
students to gain at least two perpsectives on SRI.

The first perspective allows for the fact that SRI exists, for all its
good points and bad. Just as indeed the Spanish Inquisition existed, or
as bad Californian wine exists. SRI is a phenomenon that affects and
influences business so it should be set out and described. So in that
sense there is a need to know what it is, how it is organised, what it
does and how and so on.

As business academics we have a responsibility to set this out so students
of business are aware of the system of which they are part. Just as they
need to know the workings of the stock market, economic analysis, the
significance of structure and organisational design or the processes that
support innovation.

This helps most students to negotiate the world of business with all its
good and bad.

The second perspective of course derives from the application of critical
thinking and involves addressing issues like:

What are the strengths and weaknesses of this approach or phenomenon?

What does SRI measure and what does it not measure?

What are its claims and what are its intended and unintended consequences?

What do commentators say about the topic.

Of course the difference between the two perspectives is founded on the
difference between knowledge and understanding.

But, in my view, critical thinking stands back from a subject and seeks to
looks at the advocates and critics of an idea or phenomenon with equal
detachment while seeking to question things that need to be questioned.

In doing this we impart our students with the confidence and comfort for
critical thought. It does not necessarily require them to take sides in a
debate but rather to engage in debate as a way to may be lead them to
change and improve what they see and to understanding why they thing the
change they advocate is an improvement.

But these are hard tasks and their is no monopoly of wisdom. But many of
us do seek to distinguish these two levels of analysis at least in
European business schools. But i am sure my american or japanese or
Chinese or whatever colleagues will speak for themselves as to whether
they too aspire to both knowledge and awareness.

Nigel Roome

> It might even be fun to allow the students to address the fact that SRI
> research has historically been a disaster in identifying "socially
> responsible" behavior; that there is no definition of SR behavior or CSR
> for
> that matter, as most definitions are narrow ideological conceits; that
> stocks screened for SRI do NOT perform better than comparable non-SRI
> stocks; the ONLY benefits have come from "sector segregation," which of
> course caused SRI stocks to underperform dramatically over the past 5
> years.
>
> You could start by having them read a balanced book on the subject: David
> Vogel's book on The Market for Virture, which punctures most of the
> hare-brained claims of the 'cult of CSR' and the horrid quality of
> "research" generated by SRI researchers.
>
> You might also have the students read the article I wrote in Organization
> and Environment so they will not be patronized by pre-cooked ideological
> perspectives on this and might be prompted to actually think creatively,
> without intimidation to deliver the precooked palaver juiced out by the
> CSR/SRI community.
>
> I apologize in advance for the colorful language, but isn't in time adults
> teaching kids took real responsibility for teaching critical thinking?
>
> SRI is one of the most unprogressive and elitist movements of our time...
> A
> sorry bastardization of corporate responsibility.
>
> Cheers,
>
>
> --
>
> Jon Entine
> http://www.jonentine.com
>
> (513) 527-4385
> cell: 319-8388
> FAX: 527-4386
>
>
>
>
> On 4/5/06 9:59 AM, "roome@FSW.EUR.NL" <roome@FSW.EUR.NL> wrote:
>
>> Hi Magali,
>>
>> How are you? As for SRI here are some thoughts off the top of my head.
>>
>> I can envision at least four classes on this topic.
>>
>> 1. Identifies the nature of SRI as part of the social movement that is
>> CSR
>> thinking and practice. The key point here is that it is part of the
>> contemporay 'system' or social architecture of CSR. in contrsat to the
>> past where enviornmental behaviour and basic social standards were set
>> by
>> command-and-control government the emergence of SRI is part of the the
>> markets response to CSR.
>>
>> 2. Logically this would be followed by a more detailed account of how
>> SRI
>> funds operate - their use of expert screening boards, screening
>> mechanisms
>> and so on. This might include comment on their attraction to investors
>> and their alignment with CSR principles in their own behaviour. Funds
>> of
>> course divide between those driven by CSR committeed banks and financial
>> institutions and those that are simply part of the portfolio of
>> otherwise
>> unreconstructed finance houses (simply offering SRI funds because there
>> is
>> demand for these products);
>>
>> 3. This itself could be followed by a class with a more critical
>> perpsective on SRI. The argument might be that SRI funds outperform
>> conventioanl funds. You would expect this if SR practices were an
>> indicator of the quality of maanagement. How then are SRI included
>> companies screened? In addition, if we assume (as I do) that corportae
>> responsibility requires innovation and that innovation is risky so we
>> would expect that some SRI companies would be more successful than
>> ordinary companies but others would be failures. How does this affect
>> SRI
>> performance.
>>
>> On the critical front you could also address the linguistic deception
>> involve in some well-know (globally visible) SRIs that call themselves
>> sustainability funds when at best they include companies that have
>> managed
>> to simply reduce their impact on the planet. Do these funds help or
>> hinder progress?
>>
>> 4. It would be fun and maybe even useful to set up a role play for a
>> class
>> to identify the interest and position of SRI 'stakeholders'. This might
>> include fund managers, SRI (analysts and screening agencies), companies
>> both those in and those out of these funds, investment communities,
>> investors etc. Write a vignette on each stakeholder and invite student
>> groups to consider the SRI phenomenon from the perspectives of one of
>> the
>> groups and discuss the outcomes.
>>
>> Nigel Roome
>>
>>
>>> Hi Magali. I can't help you out with a syllabus, but I can suggest a
>>> few
>>> articles you might want to include in one. Here's one on SRI I have
>>> forthcoming at SMJ that runs through the arguments, pro and con, for
>>> SRI,
>>> and finds an answer that sort of bridges these two positions:
>>>
>>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
>>>
>>> More student friendly might be the 2003 debate in O&E on the topic,
>>> between Jon Entine, Sandra Waddock, and me & my co-author, Rob Salomon.
>>> Here's a link to our portion of this debate:
>>>
>>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
>>>
>>> I hope these will be of interest. And I hope you'll share with us
>>> whatever you come up with for a syllabus.
>>>
>>> Best,
>>> Mike
>>>
>>> ********************
>>> Michael L. Barnett, PhD
>>> University of South Florida
>>> College of Business Administration
>>> Department of Management & Organization
>>> 4202 E. Fowler Avenue, BSN 3527
>>> Tampa, FL 33620-5500
>>> Phone: 813-974-1727
>>> Fax: 813-974-1734
>>> Webpage: http://www.coba.usf.edu/barnett
>>>
>>> View my research on my SSRN Author page:
>>> <http://ssrn.com/author=414796>
>>>
>>>
>>> ________________________________
>>>
>>> From: Organizations and the Natural Environment Discussion on behalf of
>>> Gordon P Rands
>>> Sent: Wed 4/5/2006 2:14 AM
>>> To: ONE-L@AOMLISTS.PACE.EDU
>>> Subject: Re: SRI
>>>
>>>
>>>
>>> Magali -
>>>
>>> I always do one session on SRI in my business & society course,
>>> basically
>>> using online material from the Social Venture Network (they have
>>> biennial
>>> reports on the amount of money under investment) and annual reports on
>>> SR
>>> mutual funds' screens and performance. I also show a video on Vermont
>>> National Bank to introduce students to the topic of community-based
>>> social
>>> investing. Shorebank Pacific would be a better example today, but I
>>> don't
>>> think there is a video about them.
>>>
>>> Gordon
>>>
>>> Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
>>>
>>>> Dear Colleagues,
>>>>
>>>> Has anyone developed an elective course on Socially Responsible
>>>> Investing
>>>> (SRI)? Or maybe integrated a few sessions on SRI in a course? I am
>>>> looking
>>>> for syllabi on the subject.
>>>>
>>>> Thanks
>>>>
>>>> Magali
>>>>
>>>> Magali Delmas
>>>> Assistant Professor
>>>> Donald Bren School of Environmental Science and Management
>>>> University of California, Santa Barbara
>>>> CA 93106-5131
>>>> Phone (805) 893-7185
>>>> Email: delmas@bren.ucsb.edu
>>>> http://www.bren.ucsb.edu/~delmas/
>>>>
>>>
>
>
>
>
>
>

Nigel:

I have no doubt, based on your email, that you would teach this in a
balanced way. Frankly, it's refreshing to read the nuanced way in which you
engage SRI, which is a stark contrast to the 'cult of SRI' that is
apologists (including many on this list) promote.

That said, balance requires asking some very difficult questions: including
fundamentally questioning whether SRI is progressive, or rather as I believe
an ultra-conservative endorsement of the status quo, generally a very
illiberal one at that. I don't believe balance in this field extends to
asking such really provocative questions. Frankly, there is too much money
being made promoting SRI as a proxy for CSR, by SRI/CSR capitalists and
academicians who have turned this field into an intellectual wasteland.

Let's be candid: the level of "academic research" in the SRI field is among
the lowest quality in the field of business ethics. Most of it, especially
from those making the rounds at conferences, takes an ideological a priori
point of view.

As Aron Kramer of BSR Aron Kramer, the new head of Business for Social
Responsibility (BSR), said at my recent conference, which had a diverse
group of academics and practitioners (including progressive companies that
are under attack by SRI groups with virtually no real insight into the
business practices of these companies, but instead use "data" to justify
their attack strategies): ³I¹m used to heated debates at CSR and SRI
conferences between the Œreally committed¹ and the Œreally, really
committed¹,² he joked.

So...if you can raise the bar, I'm all for it. But the critical level of
discourse in key places...this list (on non-environmental issues), Business
Ethics Magazine, Ethical Corporation (for which I'm again writing a column),
and in these smug conferences held every few weeks is just plain sorry.

My email specifically said we should bring various perspectives to this
issue -- I hope that's in the near future, but based on the "leaders" of the
SRI movement, and those in the CSR movement that sees the SRI movement as it
allies, I have little hope.

Cheers,

Jon




On 4/5/06 12:49 PM, "roome@fsw.eur.nl" <roome@fsw.eur.nl> wrote:

> Jon,
>
> a colourful mail indeed! But I assume that you would allow business
> students to gain at least two perpsectives on SRI.
>
> The first perspective allows for the fact that SRI exists, for all its
> good points and bad. Just as indeed the Spanish Inquisition existed, or
> as bad Californian wine exists. SRI is a phenomenon that affects and
> influences business so it should be set out and described. So in that
> sense there is a need to know what it is, how it is organised, what it
> does and how and so on.
>
> As business academics we have a responsibility to set this out so students
> of business are aware of the system of which they are part. Just as they
> need to know the workings of the stock market, economic analysis, the
> significance of structure and organisational design or the processes that
> support innovation.
>
> This helps most students to negotiate the world of business with all its
> good and bad.
>
> The second perspective of course derives from the application of critical
> thinking and involves addressing issues like:
>
> What are the strengths and weaknesses of this approach or phenomenon?
>
> What does SRI measure and what does it not measure?
>
> What are its claims and what are its intended and unintended consequences?
>
> What do commentators say about the topic.
>
> Of course the difference between the two perspectives is founded on the
> difference between knowledge and understanding.
>
> But, in my view, critical thinking stands back from a subject and seeks to
> looks at the advocates and critics of an idea or phenomenon with equal
> detachment while seeking to question things that need to be questioned.
>
> In doing this we impart our students with the confidence and comfort for
> critical thought. It does not necessarily require them to take sides in a
> debate but rather to engage in debate as a way to may be lead them to
> change and improve what they see and to understanding why they thing the
> change they advocate is an improvement.
>
> But these are hard tasks and their is no monopoly of wisdom. But many of
> us do seek to distinguish these two levels of analysis at least in
> European business schools. But i am sure my american or japanese or
> Chinese or whatever colleagues will speak for themselves as to whether
> they too aspire to both knowledge and awareness.
>
> Nigel Roome
>
>> It might even be fun to allow the students to address the fact that SRI
>> research has historically been a disaster in identifying "socially
>> responsible" behavior; that there is no definition of SR behavior or CSR
>> for
>> that matter, as most definitions are narrow ideological conceits; that
>> stocks screened for SRI do NOT perform better than comparable non-SRI
>> stocks; the ONLY benefits have come from "sector segregation," which of
>> course caused SRI stocks to underperform dramatically over the past 5
>> years.
>>
>> You could start by having them read a balanced book on the subject: David
>> Vogel's book on The Market for Virture, which punctures most of the
>> hare-brained claims of the 'cult of CSR' and the horrid quality of
>> "research" generated by SRI researchers.
>>
>> You might also have the students read the article I wrote in Organization
>> and Environment so they will not be patronized by pre-cooked ideological
>> perspectives on this and might be prompted to actually think creatively,
>> without intimidation to deliver the precooked palaver juiced out by the
>> CSR/SRI community.
>>
>> I apologize in advance for the colorful language, but isn't in time adults
>> teaching kids took real responsibility for teaching critical thinking?
>>
>> SRI is one of the most unprogressive and elitist movements of our time...
>> A
>> sorry bastardization of corporate responsibility.
>>
>> Cheers,
>>
>>
>> --
>>
>> Jon Entine
>> http://www.jonentine.com
>>
>> (513) 527-4385
>> cell: 319-8388
>> FAX: 527-4386
>>
>>
>>
>>
>> On 4/5/06 9:59 AM, "roome@FSW.EUR.NL" <roome@FSW.EUR.NL> wrote:
>>
>>> Hi Magali,
>>>
>>> How are you? As for SRI here are some thoughts off the top of my head.
>>>
>>> I can envision at least four classes on this topic.
>>>
>>> 1. Identifies the nature of SRI as part of the social movement that is
>>> CSR
>>> thinking and practice. The key point here is that it is part of the
>>> contemporay 'system' or social architecture of CSR. in contrsat to the
>>> past where enviornmental behaviour and basic social standards were set
>>> by
>>> command-and-control government the emergence of SRI is part of the the
>>> markets response to CSR.
>>>
>>> 2. Logically this would be followed by a more detailed account of how
>>> SRI
>>> funds operate - their use of expert screening boards, screening
>>> mechanisms
>>> and so on. This might include comment on their attraction to investors
>>> and their alignment with CSR principles in their own behaviour. Funds
>>> of
>>> course divide between those driven by CSR committeed banks and financial
>>> institutions and those that are simply part of the portfolio of
>>> otherwise
>>> unreconstructed finance houses (simply offering SRI funds because there
>>> is
>>> demand for these products);
>>>
>>> 3. This itself could be followed by a class with a more critical
>>> perpsective on SRI. The argument might be that SRI funds outperform
>>> conventioanl funds. You would expect this if SR practices were an
>>> indicator of the quality of maanagement. How then are SRI included
>>> companies screened? In addition, if we assume (as I do) that corportae
>>> responsibility requires innovation and that innovation is risky so we
>>> would expect that some SRI companies would be more successful than
>>> ordinary companies but others would be failures. How does this affect
>>> SRI
>>> performance.
>>>
>>> On the critical front you could also address the linguistic deception
>>> involve in some well-know (globally visible) SRIs that call themselves
>>> sustainability funds when at best they include companies that have
>>> managed
>>> to simply reduce their impact on the planet. Do these funds help or
>>> hinder progress?
>>>
>>> 4. It would be fun and maybe even useful to set up a role play for a
>>> class
>>> to identify the interest and position of SRI 'stakeholders'. This might
>>> include fund managers, SRI (analysts and screening agencies), companies
>>> both those in and those out of these funds, investment communities,
>>> investors etc. Write a vignette on each stakeholder and invite student
>>> groups to consider the SRI phenomenon from the perspectives of one of
>>> the
>>> groups and discuss the outcomes.
>>>
>>> Nigel Roome
>>>
>>>
>>>> Hi Magali. I can't help you out with a syllabus, but I can suggest a
>>>> few
>>>> articles you might want to include in one. Here's one on SRI I have
>>>> forthcoming at SMJ that runs through the arguments, pro and con, for
>>>> SRI,
>>>> and finds an answer that sort of bridges these two positions:
>>>>
>>>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
>>>>
>>>> More student friendly might be the 2003 debate in O&E on the topic,
>>>> between Jon Entine, Sandra Waddock, and me & my co-author, Rob Salomon.
>>>> Here's a link to our portion of this debate:
>>>>
>>>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
>>>>
>>>> I hope these will be of interest. And I hope you'll share with us
>>>> whatever you come up with for a syllabus.
>>>>
>>>> Best,
>>>> Mike
>>>>
>>>> ********************
>>>> Michael L. Barnett, PhD
>>>> University of South Florida
>>>> College of Business Administration
>>>> Department of Management & Organization
>>>> 4202 E. Fowler Avenue, BSN 3527
>>>> Tampa, FL 33620-5500
>>>> Phone: 813-974-1727
>>>> Fax: 813-974-1734
>>>> Webpage: http://www.coba.usf.edu/barnett
>>>>
>>>> View my research on my SSRN Author page:
>>>> <http://ssrn.com/author=414796>
>>>>
>>>>
>>>> ________________________________
>>>>
>>>> From: Organizations and the Natural Environment Discussion on behalf of
>>>> Gordon P Rands
>>>> Sent: Wed 4/5/2006 2:14 AM
>>>> To: ONE-L@AOMLISTS.PACE.EDU
>>>> Subject: Re: SRI
>>>>
>>>>
>>>>
>>>> Magali -
>>>>
>>>> I always do one session on SRI in my business & society course,
>>>> basically
>>>> using online material from the Social Venture Network (they have
>>>> biennial
>>>> reports on the amount of money under investment) and annual reports on
>>>> SR
>>>> mutual funds' screens and performance. I also show a video on Vermont
>>>> National Bank to introduce students to the topic of community-based
>>>> social
>>>> investing. Shorebank Pacific would be a better example today, but I
>>>> don't
>>>> think there is a video about them.
>>>>
>>>> Gordon
>>>>
>>>> Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
>>>>
>>>>> Dear Colleagues,
>>>>>
>>>>> Has anyone developed an elective course on Socially Responsible
>>>>> Investing
>>>>> (SRI)? Or maybe integrated a few sessions on SRI in a course? I am
>>>>> looking
>>>>> for syllabi on the subject.
>>>>>
>>>>> Thanks
>>>>>
>>>>> Magali
>>>>>
>>>>> Magali Delmas
>>>>> Assistant Professor
>>>>> Donald Bren School of Environmental Science and Management
>>>>> University of California, Santa Barbara
>>>>> CA 93106-5131
>>>>> Phone (805) 893-7185
>>>>> Email: delmas@bren.ucsb.edu
>>>>> http://www.bren.ucsb.edu/~delmas/
>>>>>
>>>>
>>
>>
>>
>>
>>
>>
>
>



--

Jon Entine
Miami University
American Enterprise Institute
http://www.jonentine.com

(513) 527-4385
cell: 319-8388
FAX: 527-4386

>Jon,
>
>I think you have some valid points and cretinism. Now, just what do
>you propose to improve the situation, especially the, as I interpret
>you comments, the lack of rigor in SRI/CSR research?
>
Dick


>Nigel:
>
>I have no doubt, based on your email, that you would teach this in a
>balanced way. Frankly, it's refreshing to read the nuanced way in which you
>engage SRI, which is a stark contrast to the 'cult of SRI' that is
>apologists (including many on this list) promote.
>
>That said, balance requires asking some very difficult questions: including
>fundamentally questioning whether SRI is progressive, or rather as I believe
>an ultra-conservative endorsement of the status quo, generally a very
>illiberal one at that. I don't believe balance in this field extends to
>asking such really provocative questions. Frankly, there is too much money
>being made promoting SRI as a proxy for CSR, by SRI/CSR capitalists and
>academicians who have turned this field into an intellectual wasteland.
>
>Let's be candid: the level of "academic research" in the SRI field is among
>the lowest quality in the field of business ethics. Most of it, especially
>from those making the rounds at conferences, takes an ideological a priori
>point of view.
>
>As Aron Kramer of BSR Aron Kramer, the new head of Business for Social
>Responsibility (BSR), said at my recent conference, which had a diverse
>group of academics and practitioners (including progressive companies that
>are under attack by SRI groups with virtually no real insight into the
>business practices of these companies, but instead use "data" to justify
>their attack strategies): "I'm used to heated debates at CSR and SRI
>conferences between the 'really committed' and the 'really, really
>committed'," he joked.
>
>So...if you can raise the bar, I'm all for it. But the critical level of
>discourse in key places...this list (on non-environmental issues), Business
>Ethics Magazine, Ethical Corporation (for which I'm again writing a column),
>and in these smug conferences held every few weeks is just plain sorry.
>
>My email specifically said we should bring various perspectives to this
>issue -- I hope that's in the near future, but based on the "leaders" of the
>SRI movement, and those in the CSR movement that sees the SRI movement as it
>allies, I have little hope.
>
>Cheers,
>
>Jon
>
>
>
>
>On 4/5/06 12:49 PM, "roome@fsw.eur.nl" <roome@fsw.eur.nl> wrote:
>
>> Jon,
>>
>> a colourful mail indeed! But I assume that you would allow business
>> students to gain at least two perpsectives on SRI.
>>
>> The first perspective allows for the fact that SRI exists, for all its
>> good points and bad. Just as indeed the Spanish Inquisition existed, or
>> as bad Californian wine exists. SRI is a phenomenon that affects and
>> influences business so it should be set out and described. So in that
>> sense there is a need to know what it is, how it is organised, what it
>> does and how and so on.
>>
>> As business academics we have a responsibility to set this out so students
>> of business are aware of the system of which they are part. Just as they
>> need to know the workings of the stock market, economic analysis, the
>> significance of structure and organisational design or the processes that
>> support innovation.
>>
>> This helps most students to negotiate the world of business with all its
>> good and bad.
>>
>> The second perspective of course derives from the application of critical
> > thinking and involves addressing issues like:
>>
>> What are the strengths and weaknesses of this approach or phenomenon?
>>
>> What does SRI measure and what does it not measure?
>>
>> What are its claims and what are its intended and unintended consequences?
>>
>> What do commentators say about the topic.
>>
>> Of course the difference between the two perspectives is founded on the
>> difference between knowledge and understanding.
>>
>> But, in my view, critical thinking stands back from a subject and seeks to
> > looks at the advocates and critics of an idea or phenomenon with equal
>> detachment while seeking to question things that need to be questioned.
>>
>> In doing this we impart our students with the confidence and comfort for
>> critical thought. It does not necessarily require them to take sides in a
>> debate but rather to engage in debate as a way to may be lead them to
>> change and improve what they see and to understanding why they thing the
>> change they advocate is an improvement.
>>
>> But these are hard tasks and their is no monopoly of wisdom. But many of
>> us do seek to distinguish these two levels of analysis at least in
>> European business schools. But i am sure my american or japanese or
>> Chinese or whatever colleagues will speak for themselves as to whether
>> they too aspire to both knowledge and awareness.
>>
>> Nigel Roome
>>
>>> It might even be fun to allow the students to address the fact that SRI
>>> research has historically been a disaster in identifying "socially
>>> responsible" behavior; that there is no definition of SR behavior or CSR
>>> for
>>> that matter, as most definitions are narrow ideological conceits; that
>>> stocks screened for SRI do NOT perform better than comparable non-SRI
>>> stocks; the ONLY benefits have come from "sector segregation," which of
>>> course caused SRI stocks to underperform dramatically over the past 5
>>> years.
>>>
>>> You could start by having them read a balanced book on the subject: David
>>> Vogel's book on The Market for Virture, which punctures most of the
>>> hare-brained claims of the 'cult of CSR' and the horrid quality of
>>> "research" generated by SRI researchers.
>>>
>>> You might also have the students read the article I wrote in Organization
>>> and Environment so they will not be patronized by pre-cooked ideological
>>> perspectives on this and might be prompted to actually think creatively,
>>> without intimidation to deliver the precooked palaver juiced out by the
>>> CSR/SRI community.
>>>
>>> I apologize in advance for the colorful language, but isn't in time adults
>>> teaching kids took real responsibility for teaching critical thinking?
>>>
>>> SRI is one of the most unprogressive and elitist movements of our time...
>>> A
>>> sorry bastardization of corporate responsibility.
>>>
>>> Cheers,
>>>
>>>
>>> --
>>>
>>> Jon Entine
>>> http://www.jonentine.com
>>>
>>> (513) 527-4385
>>> cell: 319-8388
>>> FAX: 527-4386
>>>
>>>
>>>
>>>
>>> On 4/5/06 9:59 AM, "roome@FSW.EUR.NL" <roome@FSW.EUR.NL> wrote:
>>>
>>>> Hi Magali,
>>>>
>>>> How are you? As for SRI here are some thoughts off the top of my head.
>>>>
>>>> I can envision at least four classes on this topic.
>>>>
>>>> 1. Identifies the nature of SRI as part of the social movement that is
>>>> CSR
>>>> thinking and practice. The key point here is that it is part of the
>>>> contemporay 'system' or social architecture of CSR. in contrsat to the
>>>> past where enviornmental behaviour and basic social standards were set
>>>> by
>>>> command-and-control government the emergence of SRI is part of the the
>>>> markets response to CSR.
>>>>
>>>> 2. Logically this would be followed by a more detailed account of how
>>>> SRI
>>>> funds operate - their use of expert screening boards, screening
>>>> mechanisms
>>>> and so on. This might include comment on their attraction to investors
>>>> and their alignment with CSR principles in their own behaviour. Funds
>>>> of
>>>> course divide between those driven by CSR committeed banks and financial
>>>> institutions and those that are simply part of the portfolio of
>>>> otherwise
>>>> unreconstructed finance houses (simply offering SRI funds because there
> >>> is
>>>> demand for these products);
>>>>
>>>> 3. This itself could be followed by a class with a more critical
>>>> perpsective on SRI. The argument might be that SRI funds outperform
>>>> conventioanl funds. You would expect this if SR practices were an
>>>> indicator of the quality of maanagement. How then are SRI included
>>>> companies screened? In addition, if we assume (as I do) that corportae
>>>> responsibility requires innovation and that innovation is risky so we
> >>> would expect that some SRI companies would be more successful than
>>>> ordinary companies but others would be failures. How does this affect
>>>> SRI
>>>> performance.
>>>>
>>>> On the critical front you could also address the linguistic deception
>>>> involve in some well-know (globally visible) SRIs that call themselves
>>>> sustainability funds when at best they include companies that have
>>>> managed
>>>> to simply reduce their impact on the planet. Do these funds help or
>>>> hinder progress?
>>>>
>>>> 4. It would be fun and maybe even useful to set up a role play for a
>>>> class
>>>> to identify the interest and position of SRI 'stakeholders'. This might
>>>> include fund managers, SRI (analysts and screening agencies), companies
>>>> both those in and those out of these funds, investment communities,
>>>> investors etc. Write a vignette on each stakeholder and invite student
>>>> groups to consider the SRI phenomenon from the perspectives of one of
>>>> the
>>>> groups and discuss the outcomes.
>>>>
>>>> Nigel Roome
>>>>
>>>>
>>>>> Hi Magali. I can't help you out with a syllabus, but I can suggest a
>>>>> few
>>>>> articles you might want to include in one. Here's one on SRI I have
>>>>> forthcoming at SMJ that runs through the arguments, pro and con, for
>>>>> SRI,
>>>>> and finds an answer that sort of bridges these two positions:
>>>>>
>>>>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
>>>>>
>>>>> More student friendly might be the 2003 debate in O&E on the topic,
>>>>> between Jon Entine, Sandra Waddock, and me & my co-author, Rob Salomon.
>>>>> Here's a link to our portion of this debate:
>>>>>
>>>>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
>>>>>
>>>>> I hope these will be of interest. And I hope you'll share with us
>>>>> whatever you come up with for a syllabus.
>>>>>
>>>>> Best,
>>>>> Mike
>>>>>
>>>>> ********************
>>>>> Michael L. Barnett, PhD
>>>>> University of South Florida
>>>>> College of Business Administration
>>>>> Department of Management & Organization
>>>>> 4202 E. Fowler Avenue, BSN 3527
>>>>> Tampa, FL 33620-5500
>>>>> Phone: 813-974-1727
>>>>> Fax: 813-974-1734
>>>>> Webpage: http://www.coba.usf.edu/barnett
>>>>>
>>>>> View my research on my SSRN Author page:
>>>>> <http://ssrn.com/author=414796>
>>>>>
>>>>>
>>>>> ________________________________
>>>>>
>>>>> From: Organizations and the Natural Environment Discussion on behalf of
>>>>> Gordon P Rands
>>>>> Sent: Wed 4/5/2006 2:14 AM
>>>>> To: ONE-L@AOMLISTS.PACE.EDU
>>>>> Subject: Re: SRI
>>>>>
>>>>>
>>>>>
>>>>> Magali -
>>>>>
>>>>> I always do one session on SRI in my business & society course,
>>>>> basically
>>>>> using online material from the Social Venture Network (they have
>>>>> biennial
>>>>> reports on the amount of money under investment) and annual reports on
>>>>> SR
>>>>> mutual funds' screens and performance. I also show a video on Vermont
>>>>> National Bank to introduce students to the topic of community-based
>>>>> social
>>>>> investing. Shorebank Pacific would be a better example today, but I
>>>>> don't
>>>>> think there is a video about them.
>>>>>
>>>>> Gordon
>>>>>
>>>>> Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
>>>>>
>>>>>> Dear Colleagues,
>>>>>>
>>>>>> Has anyone developed an elective course on Socially Responsible
>>>>>> Investing
>>>>>> (SRI)? Or maybe integrated a few sessions on SRI in a course? I am
>>>>>> looking
>>>>>> for syllabi on the subject.
>>>>>>
>>>>>> Thanks
>>>>>>
>>>>>> Magali
>>>>>>
>>>>>> Magali Delmas
>>>>>> Assistant Professor
>>>>>> Donald Bren School of Environmental Science and Management
>>>>>> University of California, Santa Barbara
>>>>>> CA 93106-5131
> >>>>> Phone (805) 893-7185
>>>>>> Email: delmas@bren.ucsb.edu
>>>>>> http://www.bren.ucsb.edu/~delmas/
>>>>>>
>>>>>
>>>
>>>
>>>
>>>
>>>
>>>
>>
>>
>
>
>
>--
>
>Jon Entine
>Miami University
>American Enterprise Institute
>http://www.jonentine.com
>
>(513) 527-4385
>cell: 319-8388
>FAX: 527-4386

Hi,

I thank you all for your great suggestions. I agree that it is important to
get the students to assess the value of SRI but also to think critically
about it. In my current elective, I have developed a hands-on exercise to
achieve this goal. Students are asked to rank the environmental performance
of 15 companies in the chemical sector based on various databases (Toxic
Release Inventory, ECHO compliance data, KLD, and company websites). It is
really interesting to see that students come up with different rankings
(even when using the same data source) and to discuss the choices they made
when aggregating the data and the environmental performance criteria they
choose to focus on. We also discuss the limitations of available data. I
find this exercise extremely useful. We subsequently focus on analyzing a
couple of existing specific SRI funds.

Best,

Magali

Magali Delmas
Assistant Professor
Donald Bren School of Environmental Science and Management
University of California, Santa Barbara
CA 93106-5131
Phone (805) 893-7185
Email: delmas@bren.ucsb.edu
http://www.bren.ucsb.edu/~delmas/

-----Original Message-----
From: Frank Dixon [mailto:fdixon@innovestgroup.com]
Sent: Thursday, April 06, 2006 8:16 AM
To: roome@fsw.eur.nl; ONE-L@aomlists.pace.edu; delmas@bren.ucsb.edu; Jon
Entine
Cc: Hilary Bradbury-Huang; Mark Cohen
Subject: Re: SRI

Jon,

Knowing my interest in SRI, a friend forwarded the email discussion below.
I couldn't resist commenting on it.

In virtually every area of business, the answer to the question, does this
make sense, is sometimes yes and sometimes no. You wouldn't say, it never
makes sense to build a factory or make any other type of investment.
Instead, you'd analyze the costs and benefits, and make a well informed,
logical go/no go decision.

As a result, I don't understand the effort to categorize SRI and CSR as
black or white. We don't do this in any other area of business and finance.
I don¹t think we should do it here. The absolute truth about SRI and CSR,
the truth beyond debate, is that sometimes it adds value and sometimes it
doesn't.

In theory, SRI and CSR absolutely can add value. As managers and investors
become more sophisticated and develop better CSR and SRI approaches, it is
adding value more often. There are many examples of SRI funds that
outperform. This is one of the primary drivers of rapid growth in the SRI
market. It easy to see why these funds often would outperform ­ because
they address financially relevant issues.

Old fashioned SRI involves ethical screening which can lower diversity,
increase risk and lower returns. New positive screening SRI methods screen
based on financially relevant factors. This is exactly what mainstream
investing is all about. Advanced SRI considers, for example, how well a
firm takes care of its employees (which can increase productivity and enable
attracting a higher quality workforce), does a firm make safe products, does
it have effective governance (to prevent Enron-like scandals), does it act
responsibly in developing countries (which protects access to resources and
new markets), does it minimize emissions (which lowers risk of lawsuits,
regulatory action and reputation damage).

Mainstream investing usually does not take these relevant issues into
account. Therefore in theory, SRI ABSOLUTELY can outperform mainstream
investing.

The issue is method. This is where the debate/discussion needs to occur.
There should be no debate about does SRI and CSR add value. That is
illogical. The issue is how to do we do SRI and CSR well. If it is not done
well, it won't add value. If it is done well, it will.

As you know, I am advising Wal-Mart on sustainability. They are
implementing an extremely aggressive approach. Perhaps the most aggressive
ever. They are not alone. GE, Goldman Sachs and many other large business
and financial institutions are implementing aggressive approaches. These
firms are run by some of the smartest business people in the world. They
are not doing SRI and CSR because they were pressured to do so by a
misguided NGO. They are doing it because it makes good business sense.
There is tremendous business value to be had from SRI and CSR, IF it is done
well.

I look forward to working with you again at AEI.

All the best, Frank
--
Frank Dixon
Senior Advisor
Innovest Strategic Value Advisors
www.innovestgroup.com
978-567-9567



> -------- Original Message --------
> Subject: Re: SRI
> From: roome@FSW.EUR.NL
> Date: Wed, April 05, 2006 9:49 am
> To: ONE-L@AOMLISTS.PACE.EDU
>
> Jon,
>
> a colourful mail indeed! But I assume that you would allow business
> students to gain at least two perpsectives on SRI.
>
> The first perspective allows for the fact that SRI exists, for all its
> good points and bad. Just as indeed the Spanish Inquisition existed, or
> as bad Californian wine exists. SRI is a phenomenon that affects and
> influences business so it should be set out and described. So in that
> sense there is a need to know what it is, how it is organised, what it
> does and how and so on.
>
> As business academics we have a responsibility to set this out so students
> of business are aware of the system of which they are part. Just as they
> need to know the workings of the stock market, economic analysis, the
> significance of structure and organisational design or the processes that
> support innovation.
>
> This helps most students to negotiate the world of business with all its
> good and bad.
>
> The second perspective of course derives from the application of critical
> thinking and involves addressing issues like:
>
> What are the strengths and weaknesses of this approach or phenomenon?
>
> What does SRI measure and what does it not measure?
>
> What are its claims and what are its intended and unintended consequences?
>
> What do commentators say about the topic.
>
> Of course the difference between the two perspectives is founded on the
> difference between knowledge and understanding.
>
> But, in my view, critical thinking stands back from a subject and seeks to
> looks at the advocates and critics of an idea or phenomenon with equal
> detachment while seeking to question things that need to be questioned.
>
> In doing this we impart our students with the confidence and comfort for
> critical thought. It does not necessarily require them to take sides in a
> debate but rather to engage in debate as a way to may be lead them to
> change and improve what they see and to understanding why they thing the
> change they advocate is an improvement.
>
> But these are hard tasks and their is no monopoly of wisdom. But many of
> us do seek to distinguish these two levels of analysis at least in
> European business schools. But i am sure my american or japanese or
> Chinese or whatever colleagues will speak for themselves as to whether
> they too aspire to both knowledge and awareness.
>
> Nigel Roome
>
>> > It might even be fun to allow the students to address the fact that SRI
>> > research has historically been a disaster in identifying "socially
>> > responsible" behavior; that there is no definition of SR behavior or
CSR
>> > for
>> > that matter, as most definitions are narrow ideological conceits; that
>> > stocks screened for SRI do NOT perform better than comparable non-SRI
>> > stocks; the ONLY benefits have come from "sector segregation," which of
>> > course caused SRI stocks to underperform dramatically over the past 5
>> > years.
>> >
>> > You could start by having them read a balanced book on the subject:
David
>> > Vogel's book on The Market for Virture, which punctures most of the
>> > hare-brained claims of the 'cult of CSR' and the horrid quality of
>> > "research" generated by SRI researchers.
>> >
>> > You might also have the students read the article I wrote in
Organization
>> > and Environment so they will not be patronized by pre-cooked
ideological
>> > perspectives on this and might be prompted to actually think
creatively,
>> > without intimidation to deliver the precooked palaver juiced out by the
>> > CSR/SRI community.
>> >
>> > I apologize in advance for the colorful language, but isn't in time
adults
>> > teaching kids took real responsibility for teaching critical thinking?
>> >
>> > SRI is one of the most unprogressive and elitist movements of our
time...
>> > A
>> > sorry bastardization of corporate responsibility.
>> >
>> > Cheers,
>> >
>> >
>> > --
>> >
>> > Jon Entine
>> > http://www.jonentine.com
>> >
>> > (513) 527-4385
>> > cell: 319-8388
>> > FAX: 527-4386
>> >
>> >
>> >
>> >
>> > On 4/5/06 9:59 AM, "roome@FSW.EUR.NL" <roome@FSW.EUR.NL> wrote:
>> >
>>> >> Hi Magali,
>>> >>
>>> >> How are you? As for SRI here are some thoughts off the top of my
head.
>>> >>
>>> >> I can envision at least four classes on this topic.
>>> >>
>>> >> 1. Identifies the nature of SRI as part of the social movement that
is
>>> >> CSR
>>> >> thinking and practice. The key point here is that it is part of the
>>> >> contemporay 'system' or social architecture of CSR. in contrsat to
the
>>> >> past where enviornmental behaviour and basic social standards were
set
>>> >> by
>>> >> command-and-control government the emergence of SRI is part of the
the
>>> >> markets response to CSR.
>>> >>
>>> >> 2. Logically this would be followed by a more detailed account of how
>>> >> SRI
>>> >> funds operate - their use of expert screening boards, screening
>>> >> mechanisms
>>> >> and so on. This might include comment on their attraction to
investors
>>> >> and their alignment with CSR principles in their own behaviour.
Funds
>>> >> of
>>> >> course divide between those driven by CSR committeed banks and
financial
>>> >> institutions and those that are simply part of the portfolio of
>>> >> otherwise
>>> >> unreconstructed finance houses (simply offering SRI funds because
there
>>> >> is
>>> >> demand for these products);
>>> >>
>>> >> 3. This itself could be followed by a class with a more critical
>>> >> perpsective on SRI. The argument might be that SRI funds outperform
>>> >> conventioanl funds. You would expect this if SR practices were an
>>> >> indicator of the quality of maanagement. How then are SRI included
>>> >> companies screened? In addition, if we assume (as I do) that
corportae
>>> >> responsibility requires innovation and that innovation is risky so we
>>> >> would expect that some SRI companies would be more successful than
>>> >> ordinary companies but others would be failures. How does this
affect
>>> >> SRI
>>> >> performance.
>>> >>
>>> >> On the critical front you could also address the linguistic deception
>>> >> involve in some well-know (globally visible) SRIs that call
themselves
>>> >> sustainability funds when at best they include companies that have
>>> >> managed
>>> >> to simply reduce their impact on the planet. Do these funds help or
>>> >> hinder progress?
>>> >>
>>> >> 4. It would be fun and maybe even useful to set up a role play for a
>>> >> class
>>> >> to identify the interest and position of SRI 'stakeholders'. This
might
>>> >> include fund managers, SRI (analysts and screening agencies),
companies
>>> >> both those in and those out of these funds, investment communities,
>>> >> investors etc. Write a vignette on each stakeholder and invite
student
>>> >> groups to consider the SRI phenomenon from the perspectives of one of
>>> >> the
>>> >> groups and discuss the outcomes.
>>> >>
>>> >> Nigel Roome
>>> >>
>>> >>
>>>> >>> Hi Magali. I can't help you out with a syllabus, but I can suggest
a
>>>> >>> few
>>>> >>> articles you might want to include in one. Here's one on SRI I
have
>>>> >>> forthcoming at SMJ that runs through the arguments, pro and con,
for
>>>> >>> SRI,
>>>> >>> and finds an answer that sort of bridges these two positions:
>>>> >>>
>>>> >>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950
>>>> >>>
>>>> >>> More student friendly might be the 2003 debate in O&E on the topic,
>>>> >>> between Jon Entine, Sandra Waddock, and me & my co-author, Rob
Salomon.
>>>> >>> Here's a link to our portion of this debate:
>>>> >>>
>>>> >>> http://papers.ssrn.com/sol3/papers.cfm?abstract_id=624070
>>>> >>>
>>>> >>> I hope these will be of interest. And I hope you'll share with us
>>>> >>> whatever you come up with for a syllabus.
>>>> >>>
>>>> >>> Best,
>>>> >>> Mike
>>>> >>>
>>>> >>> ********************
>>>> >>> Michael L. Barnett, PhD
>>>> >>> University of South Florida
>>>> >>> College of Business Administration
>>>> >>> Department of Management & Organization
>>>> >>> 4202 E. Fowler Avenue, BSN 3527
>>>> >>> Tampa, FL 33620-5500
>>>> >>> Phone: 813-974-1727
>>>> >>> Fax: 813-974-1734
>>>> >>> Webpage: http://www.coba.usf.edu/barnett
>>>> >>>
>>>> >>> View my research on my SSRN Author page:
>>>> >>> <http://ssrn.com/author=414796>
>>>> >>>
>>>> >>>
>>>> >>> ________________________________
>>>> >>>
>>>> >>> From: Organizations and the Natural Environment Discussion on
behalf of
>>>> >>> Gordon P Rands
>>>> >>> Sent: Wed 4/5/2006 2:14 AM
>>>> >>> To: ONE-L@AOMLISTS.PACE.EDU
>>>> >>> Subject: Re: SRI
>>>> >>>
>>>> >>>
>>>> >>>
>>>> >>> Magali -
>>>> >>>
>>>> >>> I always do one session on SRI in my business & society course,
>>>> >>> basically
>>>> >>> using online material from the Social Venture Network (they have
>>>> >>> biennial
>>>> >>> reports on the amount of money under investment) and annual reports
on
>>>> >>> SR
>>>> >>> mutual funds' screens and performance. I also show a video on
Vermont
>>>> >>> National Bank to introduce students to the topic of community-based
>>>> >>> social
>>>> >>> investing. Shorebank Pacific would be a better example today, but
I
>>>> >>> don't
>>>> >>> think there is a video about them.
>>>> >>>
>>>> >>> Gordon
>>>> >>>
>>>> >>> Quoting Magali Delmas <delmas@BREN.UCSB.EDU>:
>>>> >>>
>>>>> >>>> Dear Colleagues,
>>>>> >>>>
>>>>> >>>> Has anyone developed an elective course on Socially Responsible
>>>>> >>>> Investing
>>>>> >>>> (SRI)? Or maybe integrated a few sessions on SRI in a course? I
am
>>>>> >>>> looking
>>>>> >>>> for syllabi on the subject.
>>>>> >>>>
>>>>> >>>> Thanks
>>>>> >>>>
>>>>> >>>> Magali
>>>>> >>>>
>>>>> >>>> Magali Delmas
>>>>> >>>> Assistant Professor
>>>>> >>>> Donald Bren School of Environmental Science and Management
>>>>> >>>> University of California, Santa Barbara
>>>>> >>>> CA 93106-5131
>>>>> >>>> Phone (805) 893-7185
>>>>> >>>> Email: delmas@bren.ucsb.edu
>>>>> >>>> http://www.bren.ucsb.edu/~delmas/
>>>>> >>>>
>>>> >>>
>> >
>> >
>> >
>> >
>> >
>> >

Frank:

I appreciate your note. I agree totally. SRI and CSR brings tremendous value
to the extend that it offers information that acts as a 'market brake' on
corporate behavior. Without it, corporations would have a free run of
things, and that we all know would be disastrous.

That's what distinguishes an important company, such as KLD, which by and
large puts out very credible and important research and analysis (except for
its ratings, which are hokey, misleading, and undermine its credibility) and
the many SRI funds, which sell a totally misleading 'bill of goods' to their
customers by pushing the marketing myth that buying and selling 'highly rate
socially stocks favored-by-their-arcane-stock-picking-system can influence
corporate behavior and does "good". If Domini, Calvert, etc. acknowledged
that they are no more than depositories of liberal guilt, that's fine. But
they tend to drain the activist commitment of the affluent by selling the
myth that you can change the world by buying Brazil nut ice cream and hair
rinse. It's the same kind of drivel that makes Anita Roddick such a
despicable demagogue.

The danger is in the presumption of values inherent in the application of
the information, and the consequences, intended and otherwise, that that
has. The righteousness of the SRI community in assuming its values (most of
which are a bouillabaisse of conflicting conservative religious values and
liberal nostrums, many elitist and unprogressive) is the cancer that throws
a cloud over the work that you and others do in this field.

To me, the SRI "leaders" are akin to the fundamentalist right in their
ability to define the public debate on issues in which they represent a
distinctly miniscule, and progressively retrograde, minority.

This will ONLY change when defenders of transparency disengage themselves
from the SRI movement instead of acting beholden do and blatantly promoting
a broken system. Unfortunately, this will not happen soon. Why? Because SRI
is where the money (and prestige, alas) is, and academics are lured by that,
even if it results in intellectual dishonesty.

Thanks again for your note. I think with the intellectually honest work of
people like you, there is lots of hope that the ship can be turned around.
It just requires more people to speak out--and loudly--and specifically. No
more nostrums and letting the SRI supplicants get away with deceptive
marketing.

BTW, I'm writing on Wal-Mart in my next (June--May is written) Ethical
Corporation column. I believe you will find the take intriguing...I'd
appreciate your feedback.

Let's talk later this week if you have a chance on other matters.

Jon Entine


On 4/6/06 11:15 AM, "Frank Dixon" <fdixon@innovestgroup.com> wrote:

> Jon,
>
> Knowing my interest in SRI, a friend forwarded the email discussion below.
> I couldn't resist commenting on it.
>
> In virtually every area of business, the answer to the question, does this
> make sense, is sometimes yes and sometimes no. You wouldn't say, it never
> makes sense to build a factory or make any other type of investment.
> Instead, you'd analyze the costs and benefits, and make a well informed,
> logical go/no go decision.
>
> As a result, I don't understand the effort to categorize SRI and CSR as
> black or white. We don't do this in any other area of business and finance.
> I don¹t think we should do it here. The absolute truth about SRI and CSR,
> the truth beyond debate, is that sometimes it adds value and sometimes it
> doesn't.
>
> In theory, SRI and CSR absolutely can add value. As managers and investors
> become more sophisticated and develop better CSR and SRI approaches, it is
> adding value more often. There are many examples of SRI funds that
> outperform. This is one of the primary drivers of rapid growth in the SRI
> market. It easy to see why these funds often would outperform ­ because
> they address financially relevant issues.
>
> Old fashioned SRI involves ethical screening which can lower diversity,
> increase risk and lower returns. New positive screening SRI methods screen
> based on financially relevant factors. This is exactly what mainstream
> investing is all about. Advanced SRI considers, for example, how well a
> firm takes care of its employees (which can increase productivity and enable
> attracting a higher quality workforce), does a firm make safe products, does
> it have effective governance (to prevent Enron-like scandals), does it act
> responsibly in developing countries (which protects access to resources and
> new markets), does it minimize emissions (which lowers risk of lawsuits,
> regulatory action and reputation damage).
>
> Mainstream investing usually does not take these relevant issues into
> account. Therefore in theory, SRI ABSOLUTELY can outperform mainstream
> investing.
>
> The issue is method. This is where the debate/discussion needs to occur.
> There should be no debate about does SRI and CSR add value. That is
> illogical. The issue is how to do we do SRI and CSR well. If it is not done
> well, it won't add value. If it is done well, it will.
>
> As you know, I am advising Wal-Mart on sustainability. They are
> implementing an extremely aggressive approach. Perhaps the most aggressive
> ever. They are not alone. GE, Goldman Sachs and many other large business
> and financial institutions are implementing aggressive approaches. These
> firms are run by some of the smartest business people in the world. They
> are not doing SRI and CSR because they were pressured to do so by a
> misguided NGO. They are doing it because it makes good business sense.
> There is tremendous business value to be had from SRI and CSR, IF it is done
> well.
>
> I look forward to working with you again at AEI.
>
> All the best, Frank



--

Jon Entine
American Enterprise Institute
http://www.jonentine.com

(513) 527-4385
cell: 319-8388
FAX: 527-4386

Jon,

You definitely have a gift for language!

I agree there is a large ethical component to SRI. In fact, that's the root
of the movement. However, there's a growing part of SRI that's focused only
on financially relevant issues. The increasing relevance of these issues is
drawing in mainstream players, like Goldman Sachs, JP Morgan and Citigroup.
Of course it turns out that taking care of the environment, employees and
communities for financial reasons is also good for society. But that's not
the primary motivation.

One issue that's far to large to solve here relates to the question: what is
the appropriate role of business in society? Many would say it's not to be
the caretaker of the world, and I would agree. The issue isn't so much
positive impacts as negative. While business shouldn't be required to
"save" society, it also shouldn't be allowed to damage it.

Unfortunately this occurs on a massive scale. As shown in the attached
Wal-Mart paper, business is compelled to damage society in many ways. This
isn't intentional. It's simply the way our systems have evolved. That is
why the issue of system change is becoming so important I believe.

Catching up about this and other issues this week would be great. Just let
me know when it would be convenient to call.

All the best, Frank
--
Frank Dixon
Senior Advisor
Innovest Strategic Value Advisors
www.innovestgroup.com
978-567-9567

> From: Jon Entine <runjonrun@earthlink.net>
> Date: Sun, 09 Apr 2006 11:17:08 -0400
> To: Frank Dixon <fdixon@innovestgroup.com>, <roome@FSW.EUR.NL>,
> <ONE-L@AOMLISTS.PACE.EDU>, <delmas@BREN.UCSB.EDU>
> Cc: Hilary Bradbury-Huang <hilary@bradbury-huang.net>, Mark Cohen
>

Dear Jon:

First off, when I send you a private note I would appreciate it if you
asked permission before posting that note and your reply to the whole
list. We've always had a cordial relationship and I'd like to keep it
that way. I think you have something to say to the academic community,
even with your propensity for strong statements.

When I say I have "different information," the point is that it's an
impression, not hard data. Information is not data crunching. It came
from a number of sources (e.g., a friend with funds in the TIAA-CREF
socially-screened fund) and is not the result of rigorous analysis. I
also have the impression that the Giants have a good shot at the
pennant. I wouldn't post that to the server either.

I have a real problem with the following comment:

> A lot of this doesn't show up in the highly-biased, selectively
presented "studies"
> by SRI supplicants whose academic careers depend on promoting the
factually untenable > idea the "socially responsible" stocks
outperform.

My comment is not about claims about returns.

Jon, just about everyone reading this message knows at least one
academic whose career was hurt-perhaps nearly destroyed-by doing work in
the business-society or business-environment areas, simply because it
threatened the strong biases inherent in business schools and their
faculties. And those are quite different biases than those you assert.


If I was an opportunistic academic working on SRI (one small segment of
this research agenda!) and wanted to gain the support of most of my
colleagues in finance (likely necessary for my promotion), I would find
a way to validate that these funds would underperform, not outperform.
This would conform to the theories of my finance colleagues (and perhaps
given your numbers, to the phenomenon under study). Even if showing a
positive SRI-return relationship made someone a hero among the social
issues in management folks, they would still face significant career
risks. It would appear that far from their academic careers depending
on this research, researchers to some extent inject risk into their
careers with these studies.

I agree with you that if academics do shoddy work (regardless of the
relationships they seek to validate), there should be career
implications. And there are! I've served on the review boards of two
premier journals for years now, and it's certainly clear to me that lots
of studies that support a positive SRI-profits relationship have not
been published because they do not meet the current test of rigor in the
field.

Feel free to call me if you'd like to discuss this further.


Mike

Michael V. Russo
Charles H. Lundquist Professor of Sustainable Management Head,
Management Department Lundquist College of Business University of Oregon
Eugene, OR 97403

(541)-346-5182




------------------------------------------------------------------------
--------
From: Jon Entine [mailto:runjonrun@earthlink.net]
Sent: Sunday, April 09, 2006 7:58 AM
To: Mike Russo; ONE (Organization of the Natural Environment)
Subject: Re: SRI Returns


One thought for those who advocate teaching social investing: Would you
advocate teaching astrology in science classes?


Mike:

I'd be interested to know:


the source of your data
how you analyzed the data, as you well know, SRI data can be analyzed
based on screens, overall size of investments, etc. An underperforming
$1.2 billion fund should by my measure be given considerably more weight
than a $50 million fund.


I have not crunched the numbers in this formal way, but a review of the
performance data certainly suggests a radical downward shift in the
performance of broadly screened "socially responsible" stocks since end
of year 2000. (Note that the evidence suggests that environmental
screens, which sometimes uses hard data (subjectively applied) instead
of blatantly ideological screens have been more consistent.)

This morning, I looked at the New York Times Mutual Fund rankings, which
uses Lipper data and cross referenced it against the Social Investment
Forums list of funds that:

have stock assets of more than $100 million
use a broad range of screens (eg: that includes most funds in groups
such as Calvert, Domini, Neuberger Berman, Parnassus, Smith Barney but
excludes narrowly focused screened funds such as Ariel, Dreyfus, Winslow
Green Growth, etc.)


16 funds fit this group and were ranked for the 3-year performance.
According to the Lipper rankings, here as how they broke down in the #
ratings from 5 (best) to 1 (worst):

5 -- 3 funds (all Calvert funds, under a new portfolio manager
4 - 0 funds
3- 4 funds
2- 5 funds
1 - 4 funds

Fully 9 of 16 underperformed its peers while only 3 of 16 - or 19 % --
outperformed its peers.

When you look at "index" funds, the performance is even worse. Calvert
Social Index is performing in the bottom 19% this year, the bottom 31 %
last year, the bottom 18% in 2004, and the bottom 21% in 2003.

While the Domini Social Index is ranked a solid C or D over the past 1,
3 and 5 year period. It's currently ranked in the bottom 27%, was in the
bottom 40% last year, and the bottom 37% over three years-a D quintile
ranking. It's 10 year ranking, as with many other "socially responsible
funds", ranks as a soft "B" -- in the top 34%.

Almost all the major SRI funds I've looked at track this way.
Competitive 10 year rankings because of the sector bets on high tech and
communications companies in the 1990s and dramatic underperformance
since.

A lot of this doesn't show up in the highly-biased, selectively
presented "studies" by SRI supplicants whose academic careers depend on
promoting the factually untenable idea the "socially responsible" stocks
outperform.

I think it's revealing that Green Money and the SIF and other
embarassing SRI trade groups were as of 2005 no longer publishing
comparative Lipper and Morninstar comparisons for each fund, as the data
turned increasingly dark, and blew a huge whole in their marketing
deception.

I'd be interested in seeing you you cracked your numbers.




On 4/5/06 2:44 PM, "Mike Russo" <mrusso@lcbmail.uoregon.edu> wrote:


Dear Jon:

What is the source for your point that SRI funds have dramatically
underperformed the market in general since 2000? I have obviously
gotten different information.

The metrics are a great challenge, that's for sure.

Mike

Michael V. Russo
Charles H. Lundquist Professor of Sustainable Management
Head, Management Department
Lundquist College of Business
University of Oregon
Eugene, OR 97403

(541)-346-5182

Mike:

I'm sorrow you read ANY of the comments as directed at you. JUST THE
OPPOSITE. I admire and have admired your approach to this issue for a long
time. To me, you stand as the antithesis of what I was referring to. I
thought you knew me well enough...personally and through this and other
forums--that if I have something specific to say about someone's work, I
have no problem about saying it directly.

Your question to me about my research in this area was quite benign--not
something I thought was violating a "trust" to answer publicly. Your
question also mirrored others sent to me; I just answered yours publicly.

I'm also amazed how emails are so easily misinterpreted. Strong views do not
play well in this medium, as it's difficult to gauge the other person's
intentions without seeing them face to face.

I still would value your thoughts and/or research expressed publicly or
privately, on the performance of SRI stocks.

Jon


On 4/10/06 10:57 AM, "Mike Russo" <mrusso@lcbmail.uoregon.edu> wrote:

> Dear Jon:
>
> First off, when I send you a private note I would appreciate it if you
> asked permission before posting that note and your reply to the whole
> list. We've always had a cordial relationship and I'd like to keep it
> that way. I think you have something to say to the academic community,
> even with your propensity for strong statements.
>
> When I say I have "different information," the point is that it's an
> impression, not hard data. Information is not data crunching. It came
> from a number of sources (e.g., a friend with funds in the TIAA-CREF
> socially-screened fund) and is not the result of rigorous analysis. I
> also have the impression that the Giants have a good shot at the
> pennant. I wouldn't post that to the server either.
>
> I have a real problem with the following comment:
>
>> A lot of this doesn't show up in the highly-biased, selectively
> presented "studies"
>> by SRI supplicants whose academic careers depend on promoting the
> factually untenable > idea the "socially responsible" stocks
> outperform.
>
> My comment is not about claims about returns.
>
> Jon, just about everyone reading this message knows at least one
> academic whose career was hurt-perhaps nearly destroyed-by doing work in
> the business-society or business-environment areas, simply because it
> threatened the strong biases inherent in business schools and their
> faculties. And those are quite different biases than those you assert.
>
>
> If I was an opportunistic academic working on SRI (one small segment of
> this research agenda!) and wanted to gain the support of most of my
> colleagues in finance (likely necessary for my promotion), I would find
> a way to validate that these funds would underperform, not outperform.
> This would conform to the theories of my finance colleagues (and perhaps
> given your numbers, to the phenomenon under study). Even if showing a
> positive SRI-return relationship made someone a hero among the social
> issues in management folks, they would still face significant career
> risks. It would appear that far from their academic careers depending
> on this research, researchers to some extent inject risk into their
> careers with these studies.
>
> I agree with you that if academics do shoddy work (regardless of the
> relationships they seek to validate), there should be career
> implications. And there are! I've served on the review boards of two
> premier journals for years now, and it's certainly clear to me that lots
> of studies that support a positive SRI-profits relationship have not
> been published because they do not meet the current test of rigor in the
> field.
>
> Feel free to call me if you'd like to discuss this further.
>
>
> Mike
>
> Michael V. Russo
> Charles H. Lundquist Professor of Sustainable Management Head,
> Management Department Lundquist College of Business University of Oregon
> Eugene, OR 97403
>
> (541)-346-5182
>
>
>
>
> ------------------------------------------------------------------------
> --------
> From: Jon Entine [mailto:runjonrun@earthlink.net]
> Sent: Sunday, April 09, 2006 7:58 AM
> To: Mike Russo; ONE (Organization of the Natural Environment)
> Subject: Re: SRI Returns
>
>
> One thought for those who advocate teaching social investing: Would you
> advocate teaching astrology in science classes?
>
>
> Mike:
>
> I'd be interested to know:
>
>
> the source of your data
> how you analyzed the data, as you well know, SRI data can be analyzed
> based on screens, overall size of investments, etc. An underperforming
> $1.2 billion fund should by my measure be given considerably more weight
> than a $50 million fund.
>
>
> I have not crunched the numbers in this formal way, but a review of the
> performance data certainly suggests a radical downward shift in the
> performance of broadly screened "socially responsible" stocks since end
> of year 2000. (Note that the evidence suggests that environmental
> screens, which sometimes uses hard data (subjectively applied) instead
> of blatantly ideological screens have been more consistent.)
>
> This morning, I looked at the New York Times Mutual Fund rankings, which
> uses Lipper data and cross referenced it against the Social Investment
> Forums list of funds that:
>
> have stock assets of more than $100 million
> use a broad range of screens (eg: that includes most funds in groups
> such as Calvert, Domini, Neuberger Berman, Parnassus, Smith Barney but
> excludes narrowly focused screened funds such as Ariel, Dreyfus, Winslow
> Green Growth, etc.)
>
>
> 16 funds fit this group and were ranked for the 3-year performance.
> According to the Lipper rankings, here as how they broke down in the #
> ratings from 5 (best) to 1 (worst):
>
> 5 -- 3 funds (all Calvert funds, under a new portfolio manager
> 4 - 0 funds
> 3- 4 funds
> 2- 5 funds
> 1 - 4 funds
>
> Fully 9 of 16 underperformed its peers while only 3 of 16 - or 19 % --
> outperformed its peers.
>
> When you look at "index" funds, the performance is even worse. Calvert
> Social Index is performing in the bottom 19% this year, the bottom 31 %
> last year, the bottom 18% in 2004, and the bottom 21% in 2003.
>
> While the Domini Social Index is ranked a solid C or D over the past 1,
> 3 and 5 year period. It's currently ranked in the bottom 27%, was in the
> bottom 40% last year, and the bottom 37% over three years-a D quintile
> ranking. It's 10 year ranking, as with many other "socially responsible
> funds", ranks as a soft "B" -- in the top 34%.
>
> Almost all the major SRI funds I've looked at track this way.
> Competitive 10 year rankings because of the sector bets on high tech and
> communications companies in the 1990s and dramatic underperformance
> since.
>
> A lot of this doesn't show up in the highly-biased, selectively
> presented "studies" by SRI supplicants whose academic careers depend on
> promoting the factually untenable idea the "socially responsible" stocks
> outperform.
>
> I think it's revealing that Green Money and the SIF and other
> embarassing SRI trade groups were as of 2005 no longer publishing
> comparative Lipper and Morninstar comparisons for each fund, as the data
> turned increasingly dark, and blew a huge whole in their marketing
> deception.
>
> I'd be interested in seeing you you cracked your numbers.
>
>
>
>
> On 4/5/06 2:44 PM, "Mike Russo" <mrusso@lcbmail.uoregon.edu> wrote:
>
>
> Dear Jon:
>
> What is the source for your point that SRI funds have dramatically
> underperformed the market in general since 2000? I have obviously
> gotten different information.
>
> The metrics are a great challenge, that's for sure.
>
> Mike
>
> Michael V. Russo
> Charles H. Lundquist Professor of Sustainable Management
> Head, Management Department
> Lundquist College of Business
> University of Oregon
> Eugene, OR 97403
>
> (541)-346-5182



--

Jon Entine
American Enterprise Institute
http://www.jonentine.com

(513) 527-4385
cell: 319-8388
FAX: 527-4386

I've honestly lost the thread of the "Objective, Unbiased, Under-resourced, Outgunned, Jon 'AEI' Entine vs. the Righteous, Elitist, Unprogressive, Cancer-causing, Prestige and Money-seeking, Intellectually Dishonest SRI Supplicants" discussion, with half of it falling into my junk e-mail folder (a sign?). I first thought that I was the "Mike" you were asking data questions of. I see that it was Mike Russo. Nonetheless, I'm also glad to respond. The full paper provides details about the data sources and our methods of analysis. It's available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=885950

Not that the data matter, if one can dismiss anyone who finds any positive financial results from SRI as fatally biased. Thankfully we're not concerned, since my co-author and I got paid huge sums of money by the rich and powerful who seek to do away with the very profit machine that brought them their wealth. These same folks have also been responsible for our meteoric rise through the academic ranks. We are glad to have participated in this mainstream academic enterprise that has brought us unending prestige and legions of adoring, well-paying fans. That's what drove us to make up all of our data and to pervert all of our analysis. And that's what drove all of our peer reviewers to quickly shuffle our completely biased study through the review hurdles, as it is so easy for business and society supplicants to do.

Even if you're not an anthropologist, you might be aware that dripping sarcasm (try not to use these words out of context) is a marker not of the generation of dirty liberal-guilt hippies you generally demean for lack of objectivity as they've become elitist and unprogressive academic enablers (though, oddly enough, I suspect you grew up in this period as well), but of the generation of Gordon Gekko. I wasn't yet born in the 1960s. My co-author is younger than me. Neither of us had a prior interest in SRI or CSR before we started the project that led to our forthcoming SMJ paper. I've continued to study CSR issues, but this was my co-author's only foray into this cosmic land of CSR. Neither of us has any connections to, or ever received a dime from, any activist groups.

Fact is, we began the research for this project in response to a fledgling publishing house's quest for a handbook that described the fallacies and shortcomings of SRI. We aimed to write a Jon Entine-esque rant about the goofiness of trying to profit from social investing. The publishing house folded (perhaps brought down by hippie power?), and so we were left wondering what to do. We decided to gather up some more data and make an academic study of it. We were surprised to find the (curvilinear) relationship that we did find. And we certainly had great difficulty getting it through the review hurdles. We began the intended handbook in 1998 or 1999. Our article is forthcoming in 2006. This also explains our choice of time period. Indeed, our study ended in 2000, and so the stock bubble burst thereafter would not be accounted for in our data. But it also began in 1972, with the first SRI fund, and so many things are accounted for, and controlled for, in our data. If you run the same study over different time periods, magically, you could get different results. The stock market is wacky that way.

I'd encourage you, or anyone else, to run the same study over post-2000 time periods. That's the point of our paper - to encourage further study with more fine-grained measures such as those we introduced. The point of our paper is not to bring down "the man." (or are we "the man"? I'm confused as to who has the power in Jon's world vs. reality). In fact, we find mixed results, fully in line with the logic that you've just given the Jon stamp of approval to from Frank Dixon. As you're handing out partial exemptions from your blanket dismissal of SRI supplicants, I'll hold out hope we can get one, too. I'll hang it on my wall, alongside all the awards I've gotten for bringing down capitalism and democracy throughout the world.

Even if we can't take much of a lesson in objectivity from a man in AEI's pocket screaming that anyone finding favorable results is in rich activists' pockets and cannot be objective by definition, we can take away the notion that objectivity is important, lest we make ourselves susceptible to Jon rants (re: prior discussion one ONE list-serv about our role as advocates vs. social scientists).

Objectively, as best I can muster,
Mike

*********************************************
Michael L. Barnett, PhD
Department of Management, BSN 3527
College of Business Administration
University of South Florida
4202 E. Fowler Avenue
Tampa, FL 33620
Phone: (813) 974-1727
Fax: (813) 974-1734
Website: http://coba.usf.edu/barnett
View my research on my SSRN Author page:
<http://ssrn.com/author=414796>


-----Original Message-----
From: Organizations and the Natural Environment Discussion
[mailto:ONE-L@AOMLISTS.PACE.EDU]On Behalf Of Mike Russo
Sent: Monday, April 10, 2006 10:58 AM
To: ONE-L@AOMLISTS.PACE.EDU
Subject: Re: SRI


Dear Jon:

First off, when I send you a private note I would appreciate it if you
asked permission before posting that note and your reply to the whole
list. We've always had a cordial relationship and I'd like to keep it
that way. I think you have something to say to the academic community,
even with your propensity for strong statements.

When I say I have "different information," the point is that it's an
impression, not hard data. Information is not data crunching. It came
from a number of sources (e.g., a friend with funds in the TIAA-CREF
socially-screened fund) and is not the result of rigorous analysis. I
also have the impression that the Giants have a good shot at the
pennant. I wouldn't post that to the server either.

I have a real problem with the following comment:

> A lot of this doesn't show up in the highly-biased, selectively
presented "studies"
> by SRI supplicants whose academic careers depend on promoting the
factually untenable > idea the "socially responsible" stocks
outperform.

My comment is not about claims about returns.

Jon, just about everyone reading this message knows at least one
academic whose career was hurt-perhaps nearly destroyed-by doing work in
the business-society or business-environment areas, simply because it
threatened the strong biases inherent in business schools and their
faculties. And those are quite different biases than those you assert.


If I was an opportunistic academic working on SRI (one small segment of
this research agenda!) and wanted to gain the support of most of my
colleagues in finance (likely necessary for my promotion), I would find
a way to validate that these funds would underperform, not outperform.
This would conform to the theories of my finance colleagues (and perhaps
given your numbers, to the phenomenon under study). Even if showing a
positive SRI-return relationship made someone a hero among the social
issues in management folks, they would still face significant career
risks. It would appear that far from their academic careers depending
on this research, researchers to some extent inject risk into their
careers with these studies.

I agree with you that if academics do shoddy work (regardless of the
relationships they seek to validate), there should be career
implications. And there are! I've served on the review boards of two
premier journals for years now, and it's certainly clear to me that lots
of studies that support a positive SRI-profits relationship have not
been published because they do not meet the current test of rigor in the
field.

Feel free to call me if you'd like to discuss this further.


Mike

Michael V. Russo
Charles H. Lundquist Professor of Sustainable Management Head,
Management Department Lundquist College of Business University of Oregon
Eugene, OR 97403

(541)-346-5182




------------------------------------------------------------------------
--------
From: Jon Entine [mailto:runjonrun@earthlink.net]
Sent: Sunday, April 09, 2006 7:58 AM
To: Mike Russo; ONE (Organization of the Natural Environment)
Subject: Re: SRI Returns


One thought for those who advocate teaching social investing: Would you
advocate teaching astrology in science classes?


Mike:

I'd be interested to know:


the source of your data
how you analyzed the data, as you well know, SRI data can be analyzed
based on screens, overall size of investments, etc. An underperforming
$1.2 billion fund should by my measure be given considerably more weight
than a $50 million fund.


I have not crunched the numbers in this formal way, but a review of the
performance data certainly suggests a radical downward shift in the
performance of broadly screened "socially responsible" stocks since end
of year 2000. (Note that the evidence suggests that environmental
screens, which sometimes uses hard data (subjectively applied) instead
of blatantly ideological screens have been more consistent.)

This morning, I looked at the New York Times Mutual Fund rankings, which
uses Lipper data and cross referenced it against the Social Investment
Forums list of funds that:

have stock assets of more than $100 million
use a broad range of screens (eg: that includes most funds in groups
such as Calvert, Domini, Neuberger Berman, Parnassus, Smith Barney but
excludes narrowly focused screened funds such as Ariel, Dreyfus, Winslow
Green Growth, etc.)


16 funds fit this group and were ranked for the 3-year performance.
According to the Lipper rankings, here as how they broke down in the #
ratings from 5 (best) to 1 (worst):

5 -- 3 funds (all Calvert funds, under a new portfolio manager
4 - 0 funds
3- 4 funds
2- 5 funds
1 - 4 funds

Fully 9 of 16 underperformed its peers while only 3 of 16 - or 19 % --
outperformed its peers.

When you look at "index" funds, the performance is even worse. Calvert
Social Index is performing in the bottom 19% this year, the bottom 31 %
last year, the bottom 18% in 2004, and the bottom 21% in 2003.

While the Domini Social Index is ranked a solid C or D over the past 1,
3 and 5 year period. It's currently ranked in the bottom 27%, was in the
bottom 40% last year, and the bottom 37% over three years-a D quintile
ranking. It's 10 year ranking, as with many other "socially responsible
funds", ranks as a soft "B" -- in the top 34%.

Almost all the major SRI funds I've looked at track this way.
Competitive 10 year rankings because of the sector bets on high tech and
communications companies in the 1990s and dramatic underperformance
since.

A lot of this doesn't show up in the highly-biased, selectively
presented "studies" by SRI supplicants whose academic careers depend on
promoting the factually untenable idea the "socially responsible" stocks
outperform.

I think it's revealing that Green Money and the SIF and other
embarassing SRI trade groups were as of 2005 no longer publishing
comparative Lipper and Morninstar comparisons for each fund, as the data
turned increasingly dark, and blew a huge whole in their marketing
deception.

I'd be interested in seeing you you cracked your numbers.




On 4/5/06 2:44 PM, "Mike Russo" <mrusso@lcbmail.uoregon.edu> wrote:


Dear Jon:

What is the source for your point that SRI funds have dramatically
underperformed the market in general since 2000? I have obviously
gotten different information.

The metrics are a great challenge, that's for sure.

Mike

Michael V. Russo
Charles H. Lundquist Professor of Sustainable Management
Head, Management Department
Lundquist College of Business
University of Oregon
Eugene, OR 97403

(541)-346-5182

Jon:

Thank you for the conciliatory note. Email indeed has caused all of us
to put up with misunderstandings at one time or another.

Mike

Michael V. Russo
Charles H. Lundquist Professor of Sustainable Management
Head, Management Department
Lundquist College of Business
University of Oregon
Eugene, OR 97403

(541)-346-5182

-----Original Message-----
From: Organizations and the Natural Environment Discussion
[mailto:ONE-L@AOMLISTS.PACE.EDU] On Behalf Of Jon Entine
Sent: Monday, April 10, 2006 8:45 AM
To: ONE-L@AOMLISTS.PACE.EDU
Subject: Re: SRI

Mike:

I'm sorrow you read ANY of the comments as directed at you. JUST THE
OPPOSITE. I admire and have admired your approach to this issue for a
long time. To me, you stand as the antithesis of what I was referring
to. I thought you knew me well enough...personally and through this and
other forums--that if I have something specific to say about someone's
work, I have no problem about saying it directly.

Your question to me about my research in this area was quite benign--not
something I thought was violating a "trust" to answer publicly. Your
question also mirrored others sent to me; I just answered yours
publicly.

I'm also amazed how emails are so easily misinterpreted. Strong views do
not play well in this medium, as it's difficult to gauge the other
person's intentions without seeing them face to face.

I still would value your thoughts and/or research expressed publicly or
privately, on the performance of SRI stocks.

Jon


On 4/10/06 10:57 AM, "Mike Russo" <mrusso@lcbmail.uoregon.edu> wrote:

> Dear Jon:
>
> First off, when I send you a private note I would appreciate it if you

> asked permission before posting that note and your reply to the whole
> list. We've always had a cordial relationship and I'd like to keep it

> that way. I think you have something to say to the academic
> community, even with your propensity for strong statements.
>
> When I say I have "different information," the point is that it's an
> impression, not hard data. Information is not data crunching. It
> came from a number of sources (e.g., a friend with funds in the
> TIAA-CREF socially-screened fund) and is not the result of rigorous
> analysis. I also have the impression that the Giants have a good shot

> at the pennant. I wouldn't post that to the server either.
>
> I have a real problem with the following comment:
>
>> A lot of this doesn't show up in the highly-biased, selectively
> presented "studies"
>> by SRI supplicants whose academic careers depend on promoting the
> factually untenable > idea the "socially responsible" stocks
> outperform.
>
> My comment is not about claims about returns.
>
> Jon, just about everyone reading this message knows at least one
> academic whose career was hurt-perhaps nearly destroyed-by doing work
> in the business-society or business-environment areas, simply because
> it threatened the strong biases inherent in business schools and their

> faculties. And those are quite different biases than those you assert.
>
>
> If I was an opportunistic academic working on SRI (one small segment
> of this research agenda!) and wanted to gain the support of most of my

> colleagues in finance (likely necessary for my promotion), I would
> find a way to validate that these funds would underperform, not
outperform.
> This would conform to the theories of my finance colleagues (and
> perhaps given your numbers, to the phenomenon under study). Even if
> showing a positive SRI-return relationship made someone a hero among
> the social issues in management folks, they would still face
> significant career risks. It would appear that far from their
> academic careers depending on this research, researchers to some
> extent inject risk into their careers with these studies.
>
> I agree with you that if academics do shoddy work (regardless of the
> relationships they seek to validate), there should be career
> implications. And there are! I've served on the review boards of two

> premier journals for years now, and it's certainly clear to me that
> lots of studies that support a positive SRI-profits relationship have
> not been published because they do not meet the current test of rigor
> in the field.
>
> Feel free to call me if you'd like to discuss this further.
>
>
> Mike
>
> Michael V. Russo
> Charles H. Lundquist Professor of Sustainable Management Head,
> Management Department Lundquist College of Business University of
> Oregon Eugene, OR 97403
>
> (541)-346-5182
>
>
>
>
> ----------------------------------------------------------------------
> --
> --------
> From: Jon Entine [mailto:runjonrun@earthlink.net]
> Sent: Sunday, April 09, 2006 7:58 AM
> To: Mike Russo; ONE (Organization of the Natural Environment)
> Subject: Re: SRI Returns
>
>
> One thought for those who advocate teaching social investing: Would
> you advocate teaching astrology in science classes?
>
>
> Mike:
>
> I'd be interested to know:
>
>
> the source of your data
> how you analyzed the data, as you well know, SRI data can be analyzed
> based on screens, overall size of investments, etc. An underperforming
> $1.2 billion fund should by my measure be given considerably more
> weight than a $50 million fund.
>
>
> I have not crunched the numbers in this formal way, but a review of
> the performance data certainly suggests a radical downward shift in
> the performance of broadly screened "socially responsible" stocks
> since end of year 2000. (Note that the evidence suggests that
> environmental screens, which sometimes uses hard data (subjectively
> applied) instead of blatantly ideological screens have been more
> consistent.)
>
> This morning, I looked at the New York Times Mutual Fund rankings,
> which uses Lipper data and cross referenced it against the Social
> Investment Forums list of funds that:
>
> have stock assets of more than $100 million use a broad range of
> screens (eg: that includes most funds in groups such as Calvert,
> Domini, Neuberger Berman, Parnassus, Smith Barney but excludes
> narrowly focused screened funds such as Ariel, Dreyfus, Winslow Green
> Growth, etc.)
>
>
> 16 funds fit this group and were ranked for the 3-year performance.
> According to the Lipper rankings, here as how they broke down in the #

> ratings from 5 (best) to 1 (worst):
>
> 5 -- 3 funds (all Calvert funds, under a new portfolio manager
> 4 - 0 funds
> 3- 4 funds
> 2- 5 funds
> 1 - 4 funds
>
> Fully 9 of 16 underperformed its peers while only 3 of 16 - or 19 % --

> outperformed its peers.
>
> When you look at "index" funds, the performance is even worse. Calvert

> Social Index is performing in the bottom 19% this year, the bottom 31
> % last year, the bottom 18% in 2004, and the bottom 21% in 2003.
>
> While the Domini Social Index is ranked a solid C or D over the past
> 1,
> 3 and 5 year period. It's currently ranked in the bottom 27%, was in
> the bottom 40% last year, and the bottom 37% over three years-a D
> quintile ranking. It's 10 year ranking, as with many other "socially
> responsible funds", ranks as a soft "B" -- in the top 34%.
>
> Almost all the major SRI funds I've looked at track this way.
> Competitive 10 year rankings because of the sector bets on high tech
> and communications companies in the 1990s and dramatic
> underperformance since.
>
> A lot of this doesn't show up in the highly-biased, selectively
> presented "studies" by SRI supplicants whose academic careers depend
> on promoting the factually untenable idea the "socially responsible"
> stocks outperform.
>
> I think it's revealing that Green Money and the SIF and other
> embarassing SRI trade groups were as of 2005 no longer publishing
> comparative Lipper and Morninstar comparisons for each fund, as the
> data turned increasingly dark, and blew a huge whole in their
> marketing deception.
>
> I'd be interested in seeing you you cracked your numbers.
>
>
>
>
> On 4/5/06 2:44 PM, "Mike Russo" <mrusso@lcbmail.uoregon.edu> wrote:
>
>
> Dear Jon:
>
> What is the source for your point that SRI funds have dramatically
> underperformed the market in general since 2000? I have obviously
> gotten different information.
>
> The metrics are a great challenge, that's for sure.
>
> Mike
>
> Michael V. Russo
> Charles H. Lundquist Professor of Sustainable Management Head,
> Management Department Lundquist College of Business University of
> Oregon Eugene, OR 97403
>
> (541)-346-5182



--

Jon Entine
American Enterprise Institute
http://www.jonentine.com

(513) 527-4385
cell: 319-8388
FAX: 527-4386